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You think markets are efficient? Check this out: Barnes & Noble stock opened 2012 at $14.75 per share and falling fast; by January 5, the opening price was just $9.50. At that price, the entire company was worth just $550 million, and there was a very real fear that the entire company could go to zero, following in the footsteps of Blockbuster and other real-world retailers selling content more easily bought online.

Today, of course, all that has changed. Barnes & Noble has sold a 17.6% stake in its digital and college businesses to Microsoft, for $300 million — a deal which values B&N's remaining 82.4% stake at $1.4 billion. And while the $300 million is staying in the new joint venture and therefore not available to help the bookstore chain with cashflow issues, the news does mean that Barnes & Noble won't need to constantly find enormous amounts of money to keep up in the arms race with Amazon. That's largely Microsoft's job, now.

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In the last couple of years Barnes & Noble has made some big inroads into the e-book market, cutting into Amazon's huge lead. As it stands, Amazon still has about 60 percent of the e-book pie, Barnes & Noble has around 25 percent, and Apple sits at around 15 percent, with smaller players like Sony and Kobo left to fight over the crumbs. Of course, those numbers are just estimates, and depending on who you talk to, Amazon's share might actually be closer to 65 percent.

While a strong second place is not a bad position to be in, the problem for Barnes & Noble has been how much it cost to get there and how much it's going to cost to pick up more market share from Amazon and Apple, which has steadily ramped up its iBooks digital reading platform and recently launched a major digital textbook initiative. Both Amazon and Apple, needless to say, have huge cash reserves to dip into for marketing, engineering, and R&D, while Barnes & Noble has appeared at times as if it's simply battling for survival. Enter Microsoft and its $300 million investment in what amounts to a spinoff of Barnes & Noble's Nook digital media business, which includes e-books, textbooks, and all those digital newspapers and magazines its been selling on Nook devices

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