Company settles patent dispute with US bookseller Barnes & Nobel takes a stake in new Nook e-book subsidiary.

Microsoft bets on Nook

Microsoft has teamed up with US bookseller Barnes & Noble to invest in the Nook e-book platform.

The surprise announcement comes after the firm’s agreed to bury the hatchet in an ongoing patent dispute. Microsoft sued Barnes & Noble last year claiming that the Android-based Nook e-reader violated a number of patents.

Now Microsoft is set to invest $300 million in a new subsidiary imaginatively dubbed ‘newco’ that will be responsible for the Nook e-book and Barnes & Noble’s university bookstore businesses. Microsoft will own 17.6 per cent of the new venture.

"The shift to digital is putting the world’s libraries and newsstands in the palm of every person’s hand, and is the beginning of a journey that will impact how people read, interact with, and enjoy new forms of content," said Microsoft president Andy Lees.

Microsoft confirmed that an immediate upside would be the arrival of a Nook application for Windows. The software giant is aiming to introduce e-reading applications across a variety of Windows devices which we assume includes Windows Phone and some sort of Metro-UI version for Windows 8.

The agreement also means that Barnes & Nobel has fallen into line and will now pay Microsoft royalties for Nook e-readers sold in what has come to be known in the industry as Microsoft’s Android tax.

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