$300 million doesn't buy much these days —

Microsoft, Barnes & Noble bring their weird Nook “partnership” to a formal end

Microsoft investment put an end to a patent lawsuit, but not much else.

Microsoft and Barnes & Noble announced today that they were terminating their partnership that was in some way connected to the Nook e-reader.

In 2012, Microsoft invested $300 million to take a 17.6 percent stake in Barnes & Noble's Nook subsidiary, Nook Media. This investment produced two things: a Nook app for Windows 8 and an end to a patent lawsuit between the two companies. Barnes & Noble was challenging a number of Microsoft patents that the software firm asserted were infringed by the Nook. After the investment, the book company was granted a royalty-bearing license to Microsoft's patents.

Since then, Nook's performance has left something to be desired. In 2013, Barnes & Noble said that it was scaling back the amount of in-house hardware design work it was doing to cut costs in favor of partnerships with third-party manufacturers. There were also rumors in mid-2013 that Microsoft was interested in buying the entire Nook subsidiary.

This year, a couple of co-branded Samsung/Nook tablets preinstalled with Nook software were released, and Barnes & Noble announced a plan to hive off the Nook division entirely. The company said that ending the Microsoft partnership would provide a "clearer path" to that split, stating the split could be finalized by the end of August next year. To that end, it has bought out Microsoft's investment in Nook Media with cash and stock.

The "partnership" never appeared to be anything of the sort. Even development of the Nook app for Windows 8 was planned to be discontinued earlier in the year when the companies changed the terms of their agreement, and nothing more substantial, such as Windows/Nook e-readers, ever materialized. While the new agreement terms pointed at a Microsoft-developed e-reader application, that hasn't shipped either. For the moment, at least, it looks as if Microsoft's e-reader ambitions are on hold.

Update: Although the discontinuation of the Nook app was intended by Barnes & Noble, the app was updated in June and remains available in the Windows Store, so it's possible that this plan was itself changed.

Channel Ars Technica