Is This Microsoft's Dumbest Move Yet?

The following video is from Friday's installment of the Motley Fool's Weekly Tech Review, in which host Chris Hill and analysts Eric Bleeker and Jason Moser look at the biggest stories driving the tech sector this week.

Microsoft (NASDAQ: MSFT  ) made a $300 million investment last year in Barnes & Noble (NYSE: BKS  ) , focusing primarily on the company's e-reader business. However, Microsoft's investment came at a time when there were already troubling signs for e-readers, such as how they would compete as tablet prices were being slashed. As an example, Apple has managed to take 20% of the e-book market without making iBooks a priority. Likewise, Amazon.com (NASDAQ: AMZN  ) has long been a more entrenched competitor and used the Kindle to head-off the Nook positioning itself as the more "tablet-y" of the companies operating from a strength in e-readers. 

The end result is that Barnes & Noble's Nook e-reader has been fading as more multi-purpose tablets have come to dominate this space. Nook posted a $262 million loss in fiscal 2012 and a $475 million loss in fiscal 2013. As of this week, the company announced it was getting out of Nook hardware, casting doubt over the future of Nook as a platform. While the Nook might not be Microsoft's biggest failed bet -- the company recently wrote down $6.2 billion in value from aQuantive -- it also seemed like one of Microsoft's more short-sighted moves that was devoid of a great strategic aim. 

In the following video, Eric and Jason talk about Microsoft's investment in the Nook and the company's overall acquisition strategy headed forward. 

The full video is available here.

In the past, most tech companies specialized in particular niches, but recently, the largest players have gotten into a trillion-dollar turf battle with the future of the entire industry at stake. Microsoft now finds itself in battle with not only Apple, but also with companies such as Amazon, which previously weren't on its radar. Find out which company we believe will emerge victorious in this all-out corporate war by reading the Fool's latest research report. It's absolutely free, so get your copy today by clicking right here.

The relevant video segment can be found between 7:58 and 12:20.


Read/Post Comments (15) | Recommend This Article (12)

Comments from our Foolish Readers

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  • Report this Comment On June 29, 2013, at 8:08 PM, jrm713 wrote:

    Don't forget the Microsoft 8 distaster. I bought a new desktop and took it back for a refund. I wonder how many other customers did that. I'll bet alot.

  • Report this Comment On June 29, 2013, at 8:32 PM, VegasSmitty wrote:

    Microsoft is so dumb they've got Billions....unlike the fools at the Motley Fool.

  • Report this Comment On June 29, 2013, at 8:41 PM, jjoensuu wrote:

    Motley M.O.R.O.N.s pushing their own ideas in an attempt to steer the stock market. I guess they get paid from getting the Google stock ahead. But these ideas are wrong, among other things, about what Nook can be used for, what is available for Nook, and whether everyone now would want a tablet when they might prefer something simpler.

  • Report this Comment On June 29, 2013, at 8:53 PM, karlsmq wrote:

    E READERS HAS AND WILL ALWAYS HAVE LIMITATIONS.FIRST THEY ARE EXPENSIVE ,USE AND NEED LOTS OF CHARGING BATTERIES,WHEN WE REALLY READ WE READ FOR A WHILE SOMETIMES OURS ,WHO WANT TO LOOK AT A SCREEN STUDYING FOR OURS,

  • Report this Comment On June 29, 2013, at 9:29 PM, southernshark wrote:

    Ok obviously a lot of you people don't read recreation ally. I... am a reader. I like to read. I read 1 to 2 books a week. I read history. I read sci-fi. I read zombie books. What's my poiint?

    The point is, I own 1 ipad, 1 Fire tablet, 1 5" Android phone and 2 Kindles (1 white, 1 old school). The ONLY thing I read on is the Kindle White. The quality of text of an e-reader is immeasurably better on a Kindle or Nook than on a "multi-purpose" tablet.

    I recognize that there will always be people out there, obviously like many of the Fool's on here, who can not afford to pay 100 dollars for a separate e-reader, but that does not mean that the market does not exist. For those of us with some slight disposable income, it is a solid investment.

    Carry on.

  • Report this Comment On June 29, 2013, at 9:56 PM, rotorhead1871 wrote:

    MS is adrift......Ballmer has lost direction....just a matter of time till he is gone....

  • Report this Comment On June 29, 2013, at 10:14 PM, BrandNewBrony wrote:

    Huh, all this over E-readers and my trusty lil' PSP just keeps being useful! I can read, listen to music, surf the web AND play 7 different consoles! All for 30 bucks. Anyway, have a ponyriffic day!

  • Report this Comment On June 29, 2013, at 10:22 PM, Jeffkory wrote:

    It seems like microsuck is really making some stupid bad choices- I hate 8- It's the most aggravating horrible os so far- It is definitely my last microsuck product.I hope someone comes out with a user friendly os similar to what the world is used to. Apps- I don't need any of that crap on my COMPUTOR- I don't care if their on my cell phone- I don't use them and don't need them popping up every time I move the curser..

  • Report this Comment On June 29, 2013, at 11:21 PM, jackgxx wrote:

    structurally it's not a bad move to have a e-publish platform that can morph into something akin to I-tunes, Amazon, etc..

    very late into the game (typical of MS) and the smell of a B(3) project (Bright Boy Ballmer) .. execution and profitability will elude them/him as always.

    MS keep betting on those H1B visa prodigy .. with more than a decade H1B visa policy, your now NOT known for hiring the best and the brightest, just the meekest and the cheapest!

  • Report this Comment On June 29, 2013, at 11:38 PM, normgarry wrote:

    I bought a Barnes and Noble nook recently: 16GB for $150 with a 9 inch screen. In just about every way, a better device than ipad mini and probably iPad itself.

    youtube.com/watch?v=gkgUfLOTgvg

  • Report this Comment On June 30, 2013, at 12:43 AM, patsaxon wrote:

    Windows 8 is the best O/S and it was the only way to be able to compete with Apple. Windows XP is old technology and so is that stupid Start Button.

  • Report this Comment On June 30, 2013, at 12:55 AM, lwrachwitz wrote:

    I was able to change my Windows 8 back Windows 7 start menu. Works great

  • Report this Comment On June 30, 2013, at 2:56 AM, keramikfool wrote:

    Microsoft is not an innovator, it is an aggregate. Teams competing with teams under the direction of Gates that stack the s#!t up so high until it becomes something tangible, a product like Win 8 for example. 90% of my hard drive doesn't need to be online all the time, or at all for that matter. A go between, a small tablet running Win 8 for example, could do this perfectly. The main operating system, programs, nude photos of my dog, emails, tax information, and such would be stored on the PC with limited or no Internet access. The "go-between" could mule around as it likes online. Scanning 8 GB flash drive for the bad guy is not an act of congress.

  • Report this Comment On June 30, 2013, at 4:33 AM, XP4EVR wrote:

    Microsoft-

    Next year when you KILL WINDOWS XP

    YOUR ENTIRE CORPORATION WILL BE ABANDONED BY THE MILLIONS OF US WHO LOVED THAT PLATFORM.

    MICROSOFT WILL COLLAPSE WHEN USERS CAN NO LONGER USE XP.

    I HIGHLY SUGGEST YOU UPDATE, MODERNIZE AND RE-RELEASE XP AGAIN OR WE WILL BE FORCED TO MOVE AWAY FROM WINDOWS ALTOGETHER IN SEARCH OF A USER FRIENDLY OPERATING SYSTEM,

    WHICH NEITHER WINDOWS 7 OR 8 IS.

    RESSURECT WINDOWS XP OR ITS CURTAINS FOR MICROSOFT, MARK MY WORDS!

    Kevin McCloskey

    Philadelphia, Pennsylvania

    kevinskumputers@yahoo.com

  • Report this Comment On June 30, 2013, at 11:04 AM, techy46 wrote:

    Consumers, socialists, want technology dumbed down to children, family and grand parent level entertainment standards. Microsoft should leave that the experts in toys like Apple and Google and focus on offering Microsoft's enterprise level toys to anyone with the abilities to use them. It will limit Microsoft's revenue and profits but make for a much more focused and rich business model.

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