Loss-making Nook e-reader device, launched by bookseller Barnes & Noble has suffered from major drop in sales over last year
Microsoft has announced it is pulling support for Barnes & Noble’s Nook tablet after two and a half years, following a period of downturn that included a slump in sales.
The bookseller will reportedly pay Microsoft around $120 million to buy back its stake in Nook Media, the company that oversees the e-reader business, which it is looking to spin off to become a separate entity by August 2015, according to the Wall Street Journal.
Microsoft originally invested $300 million in Nook Media in October 2012 in return for a 17.6 percent stake in the joint venture, meaning a significant writedown for the company.
“We mutually agreed that it made sense to terminate the agreement,” a Microsoft spokesman told Reuters in an email.
Microsoft’s share is now set to be bought by another Nook Media stakeholder, Pearson PLC, which said it would pay $62.7 million to acquire the company’s shares.
First launched in 2009, the Nook suffered in the face of increasing competition from the likes of Amazon and Apple as more and more consumers began using tablets for reading.
This downturn was reflected in recent earnings, the latest of which showed that Barnes & Noble saw around $46 million less in profits this quarter than in the same period last year.
The relationship between Microsoft and Barnes & Noble had been under scrutiny recently following reports earlier this year that the two companies were revising their partnership deal as part of a scaling down of the Nook business.
Then, in June, Barnes & Noble announced it would spin off Nokia Media, which includes a range of bookstores situated on university campuses, to focus on its retail book business.
The decline marked a major turnaround for the business, as Microsoft had reportedly been considering a buyout of Nook Media’s ebook business for a reported $1 billion (£602 million) just a few months beforehand.
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