Shares of Barnes & Noble are on the rise today on rumors that Microsoft (News - Alert) may be paying $1 billion to acquire the rest of the Nook stake that it doesn't already own. Microsoft had already taken a 17% ownership position in Nook Media about year ago.
This is a curious move for Microsoft in terms of the eBook market. With tablets becoming more prevalent and certainly offering much more versatility, the feeling is that eReaders' future may not be very bright. Nook itself hasn't done so well in sales as of late., but this investment is perhaps more about a competitive move against Google than opening up new markets to Microsoft.
With the acquisition of Nook, Microsoft will no doubt supplant the Android (News - Alert)-based models with its own version of Windows RT or some variant of it. The other notable competitor in this market is Amazon with its own eReader, Kindle, with some of the models running Android. It is doubtful that Nook will be able to dethrone Kindle in the eReader space, but Microsoft is never deterred easily.
For today, Barnes & Noble shareholders are enjoying a near 17% rise in the stock value. As for the future of Barnes & Noble and its stores, it's hard to see the classic book model keeping up with the digital eBook, but counting out physical books entirely at this point would be premature.