Microsoft, Barnes & Noble team up Mon Apr 30, 2012 7:28am EDT (Reuters) - Microsoft Corp will invest $300 million in Barnes & Noble Inc's digital and college businesses, valuing them at $1.7 billion. Shares of Barnes & Noble jumped 79 percent. Microsoft will get a 17.6 percent stake in the new unit, while Barnes & Noble will own about 82.4 percent, the companies said in a statement on Monday. The business, whose name has not yet been decided, will have an ongoing relationship with Barnes & Noble's retail stores. Barnes & Noble, the No. 1 U.S. bookstore chain, said in January that it might spin off its digital business, which includes its Nook e-reader. The companies will introduce an application for the Nook on Windows 8, the upcoming version of Microsoft's operating system. Barnes & Noble is investing heavily to develop its popular Nook devices and the e-books sales they generate as readers move away from traditional books. Barnes & Noble and Microsoft have settled their patent litigation, the companies said. Shares of Barnes & Noble were up 79 percent at $24.50 in premarket trading. The company was valued at just above $823 million at Friday's close. Microsoft shares rose 0.7 percent to $32.19. Reporting by Mihir Dalal in Bangalore; Editing by Joyjeet Das