Barnes & Noble Inc. (BKS) rose the most ever after saying that Microsoft Corp. (MSFT) will invest $300 million in a new subsidiary that combines the bookseller's Nook digital reader and college businesses.
The shares jumped 83 percent to $25.06 at 9:39 a.m. in New York for the largest intraday gain since the company's initial public offering in 1993. Barnes & Noble had declined 5.5 percent this year before today.
The real problems with this are going to come for Apple (AAPL) and Amazon (AMZN), specifically Apple's (and Amazon's) digital bookstore dreams. Microsoft (MSFT) gets access to Barnes' massive retail holdings, while Barnes gets Microsoft's technology -- specifically, the integrated world upcoming in Windows 8 which will run across ARM and Intel devices.
Think tablets. Think what I referred to previously, which is the idea of you being able to actually have one environment across your laptop or desktop, your tablet and your phone.
Then remember this -- Microsoft has "leaked" that Office Standard will come with all Windows 8 ARM processor versions. There's no official word on that but if it's true that will mean that you'll buy Office for your office, but for your tablet or phone you'll have access to it on the go for presentations and work as part of the base package.
Apple does not do any of this particularly well today. Neither does Google (GOOG). In fact, they both do it pretty much "not at all" across all three environments -- Apple is unified across the tablet and iPhone, but not with the laptop or desktop. Google's Android is likewise a tablet and phone environment and their "Chrome-based" laptops have gone nowhere thus far. Oh, and Microsoft already has their cloud infrastructure up and running. Those that follow me know I am not a fan of the "cloud" for a whole host of reasons, but there are a lot of people who love the versatility and access and simply don't give a damn about the risks -- or judge them to be less than the risk of their own data management screwups (e.g. lack of a backup at a bad time.) As for Amazon the Kindle doesn't even pretend to be this sort of "unifying" environment.
There's real potential here folks, and it's being grossly under-appreciated. Yeah, there are no guarantees, and Microsoft has a history of screwing things up (Hotmail anyone?) but this development definitely bears watching.
Disclosure: Apple is under more threat here than Google -- and that nasty spike on earnings is looking more and more tenuous..... As disclosed in TICKS (become a "gold donor" if you want access to that area and much more on the forum) I took profits on my Apple short before the earnings but as the worms become more apparent a longer-term short becomes more and more enticing. No position at this instant but that's very likely to change.