New York -- Microsoft Corp. and Barnes & Noble have entered into an agreement by which Microsoft will invest $300 million in Barnes & Noble’s digital-book (Nook) business and college texts unit.
With the arrangement, Barnes & Noble's digital and college businesses will become a new, still-to-be-named subsidiary in which Barnes & Noble holds an 82.4% stake and Microsoft owns 17.6%. The agreement also means the two companies have settled their patent dispute.
As part of the move, there will be a Nook application included in the new Windows 8, scheduled to have a release preview in early June.
The agreement comes after the companies feuded over the Nook. Microsoft in 2011 sued Barnes & Noble and the manufacturers of the Nook, charging the device infringed on its patents. As part of the new arrangement, the two companies settled their dispute. Going forward, Barnes & Noble and the new subsidiary will have a royalty-bearing license under Microsoft's patents for the Nook.
“Microsoft's investment in [the new subsidiary], and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform … will allow us to significantly expand the business," Barnes & Noble CEO William Lynch said in a statement.