Barnes & Noble's struggling Nook e-book division can breathe a little easier, now that Microsoft has let the bookseller off the hook on its promise to offer e-reader apps for Windows 8 and Windows Phone.
Redmond pumped $300m into Nook back in 2012, in a deal that gave it a 17.5 per cent stake in B&N's underperforming e-book subsidiary. In exchange, Nook agreed to develop a branded reader app for Windows 8 – which it did – and another for Windows Phone, although the latter has yet to appear.
Now it seems it never will. A filing with the US Securities and Exchange Commission that was made public on Thursday reveals that B&N and Microsoft have agreed to amend their original deal to allow Nook to give up on its Windows efforts.
The still-in-development Windows Phone app will be scrapped. More surprisingly, however, Nook will also stop distributing its existing e-reader app for Windows 8, which is on version 1.8 and enjoys a 3.6-star rating in the Windows Store.
In its place will apparently be something called the "Microsoft Consumer Reader," which we can only assume will have a different name by the time it actually ships. From the sound of it, this will be a Microsoft-developed app that's compatible with Nook books and the Nook store but can also be used to read other types of content.
Under the terms of the amended agreement between B&N and Microsoft, there will be Nook branding featured within Microsoft Consumer Reader, and Nook has agreed to "cooperate in good faith with Microsoft to transition users" to the new app.
The news doesn't bode well for either company. That Nook would even want to stop developing its Windows 8 app suggests it wasn't bringing in as much business as the Nook apps for other platforms, such as Android and iOS (even though the apps themselves are free). That's hardly the kind of publicity Microsoft wants for its latest OS.
But it also shows Nook continuing to scale back its operations amid plummeting sales. In B&N's most recent quarterly earnings report, the Nook division's revenues were down 50.4 per cent from the same period a year ago, and CEO Michael Huseby announced layoffs that he described as "ongoing."
B&N's SEC filing did not give a timeline for when the Nook app for Windows 8 will be retired, and Redmond declined to share any details regarding Microsoft Consumer Reader (or whatever it's going to be called). ®