It was the best of times, it was the worst of times.
Barnes & Noble has agreed to buy back Microsoft's stake in its Nook division, just more than two years after the companies first entered into a commercial agreement. The move, announced in an SEC filing on Thursday, was framed as paving the way for a standalone Nook business.
"Such termination will allow the Company to continue its rationalization of the Nook Digital business and enhances Barnes & Noble’s operational and strategic flexibility," Barnes & Noble said in a statement.
Microsoft invested $300 million in the Nook business in 2012, giving it a 17.6% stake in the Nook division at the time. For Microsoft, the agreement promised to strengthen its ties with a growing digital and hardware service and potentially would give it additional footing against competition from the likes of Amazon and Apple.
Since then, Barnes & Noble's physical and digital businesses have experienced significant headwinds. On Thursday, the bookseller announced that revenue for the Nook segment in the most recent quarter was down more than 40% year-over-year.
Barnes & Noble announced in June that it would spin out its Nook division into a separate public company. The split is expected to be finalized by August 2015.