Microsoft Corporation (MSFT) Shoring Up Barnes & Noble Inc (BKS) With This Big Bid

Microsoft Corporation (MSFT)Microsoft Corporation (NASDAQ:MSFT) got back in the news yesterday when there was much lamenting about the company’s $300 investment in NOOK Media LLC, an cooperative tablet venture with Barnes & Noble Inc (NYSE:BKS), which has flopped so badly that Barnes & Noble has been publicly looking to rid itself of its entire NOOK division. Many were wondering what would become of Microsoft’s investment, especially since the NOOK tablets were running the Android operating system by Google Inc (NASDAQ:GOOG) and not some version of Windows.

Some of the news Tuesday suggested that Microsoft Corporation (NASDAQ:MSFT) may look to make a play for the NOOK division and perhaps leverage it into some new opportunities for Microsoft in the mobile device universe. Apparently, there was more to it that just speculation. A document was revealed Thursday that seemed to indicate that Microsoft has made, or is making, a bid to buy the entire NOOK Media enterprise for about $1 billion. When Microsoft Corporation (NASDAQ:MSFT) put in its $300 million, that gave the company a 17-percent share in a $1.8-billion valuation company.

While one analyst in particular thinks that bid is a little too high – about $27 a share in Barnes & Noble Inc (NYSE:BKS) stock – the talk is certainly causing a stir on the Street. Late in the trading day Thursday, as this report surfaced that the bid was made as far back as late March, Barnes & Noble Inc (NYSE:BKS) stock has rallied, up 21 percent to $21.50 a share.

Barnes & Noble Inc has indicated that it would stop tablet production by 2014 and would focus on producing content for other tablet platforms. Could this type of play – the bid for NOOK media is only about 30 percent smaller than Barnes & Noble Inc total market cap – signify a future relationship between NOOK content and Microsoft Corporation (NASDAQ:MSFT) Windows-based tablets?

Maybe something similar to what Inc (NASDAQ:AMZN) set up with its Kindle devices – selling content that can only be used on a Kindle device or a Kindle app? Could you see something similar happening with the NOOK and Microsoft?

What do you think about this development? Microsoft Corporation (NASDAQ:MSFT) stock is down slightly on the day – is this an indicator of anything, and are you watching Barnes & Noble Inc (NYSE:BKS)? Let us know your thoughts in the comments section below.