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Microsoft wants a piece of the e-reading game, and the company is willing to drop $300 million to get it.

The company is announcing the large investment as part of a strategic partnership with Barnes & Noble this week, probably in the hopes of competing with the likes of Amazon and Apple on the digital-book market. Along with some patent purchases, Microsoft’s cash injection also signals a likely Windows 8 application for Barnes & Noble’s e-reader, the Nook.

Microsoft’s investment is a bold one—assuming the potential Nook business at twice that of Barnes & Noble’s total market value. But the company sees an opportunity for further growth, even with serious competitors already doing well. And with hundreds of millions of Windows customers around the world—Nook’s catalogue could reach a huge new audience. Kindle, iPad, lookout—you’ve got a new challenger for king of the e-reader hill.