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Summary Box: B&N, Microsoft team up

The Associated Press

FILE - This file product image provided by Barnes & Noble Inc., shows the new $249 Nook Tablet, which was unveiled Monday, Nov. 7, 2011, in New York. Barnes & Noble Inc. and Microsoft Corp. are teaming up to create a new Barnes & Noble subsidiary that will house the digital and college businesses of the bookseller and include a Nook application for Windows 8. The companies said Monday, April 30, 2012 that they are exploring separating those businesses entirely. That could mean a stock offering, sale, or other deal could happen. (AP Photo/Barnes & Noble Inc., File)

THE DEAL: Microsoft provided an infusion of money to help Barnes & Noble compete with top electronic bookseller Amazon. In exchange, Microsoft gets a long-desired foothold in the business of e-books and college textbooks.

HOW IT WILL WORK: Microsoft Corp. is making a $300 million investment. It will take a 17.6 percent stake in a subsidiary being set up for Barnes & Noble's e-book and college textbook businesses.

THE SIGNIFICANCE: The agreement underscores the importance of electronic bookstores as traditional booksellers and technology companies jockey for position in the increasingly competitive market.