Nook + Samsung

For a while there it looked like Microsoft would either purchased Barnes & Noble's struggling Nook e-book reader business or partner with the firm to create Windows-based Nooks. But today, Barnes & Noble upended those possibilities in announcing a partnership with Samsung in which the consumer electronics giant will make future Nook tablets.

Some may see this as a blow to Microsoft and/or Windows. But I see this as bullet dodged: Let's face it, the last thing Microsoft needed was another money-losing hardware product line.

Certainly, for Barnes & Noble, this is a nice out, too, since it really couldn't afford to invest in the hardware lineup.

"We are very excited and proud to partner with Samsung, a world-class technology and tablet leader, to create customized co-branded devices featuring our valuable NOOK reading experience and digital content catalog for Barnes & Noble customers nationwide," Barnes & Noble CEO Michael P. Huseby said. "Samsung brings our customers great new products and evidences our commitment to our NOOK customers and growing our digital content business."

Barnes & Noble currently offers both standalone e-book readers—like the Nook Glowlight, which costs $99—plus a lineup of Android-based Nook tablets that come in both 7-inch ($129+) and 9-inch ($179) variants. The Samsung deal involves replacements for those latter devices only.

Under terms of the deal, Samsung will develop a cobranded version of its popular 7-inch Samsung Galaxy Tab 4, the original version of which currently sells for about $200 on Amazon.com. The Samsung Galaxy Tab 4 NOOK, as the device is called, will debut in the United States in August and will be prominently displayed and sold alongside Nook e-readers in Barnes & Noble retail stores and online. It will feature customized Nook reading and shopping software.

Barnes & Noble has pledged to buy one million of the devices from Samsung over the next 15 months, and it will of course continue to support the existing tablets, which have typically garnered very positive reviews. For the struggling book seller, this deal allows it to reposition Nook as a content business rather than a hardware business.

But what about Microsoft?

As you may know, my Windows Weekly co-host Mary Jo Foley had coined the term "Wook" to describe a presumed Microsoft-built Nook that never materialized. It is building its own e-reader software for Windows/Windows Phone that will allegedly be Nook compatible. This is important because Nook has stopped updating its Windows app (which is also excellent, by the way).

Put simply, it's all very unclear. But with a huge investment in the Nook business, Microsoft now has a stake in yet another Android-based business. Weird.