Barnes & Noble shares soar on Microsoft deal (Reuters) - Barnes & Noble Inc said it will separate its digital and college book businesses into a new subsidiary, giving Microsoft Corp a 17.6 percent stake in the new unit, and the bookstore operator's shares nearly doubled in premarket trading on Monday. Microsoft will invest $300 million for its stake in the new unit, which will be a Delaware limited liability company. Its name has not been decided. Barnes & Noble will own about 82.4 percent of the business, which will continue to tap the resources of Barnes & Noble's bookstore chain, the largest in the United States. The deal with Microsoft gives new fire power to Barnes & Noble, which has been engaged in an expensive battle with Amazon.com's market-leading Kindle. "It gives them a much larger partner with deeper pockets, it gives them increased reach," said Morningstar analyst Peter Wahlstrom. In the last two years they've had their backs against the wall. Barnes & Noble has said it commands about 27 percent of the U.S. market for e-books and e-readers. The company said in January that it might spin off its digital business, which includes its Nook e-reader. The company did not say if it would take the new unit public. Barnes & Noble is investing heavily to develop its popular Nook devices and the e-book sales they generate as readers move away from traditional books. Shares of Barnes & Noble soared 92 percent to $26.32 in premarket trading. Additional reporting by Martinne Geller in New York and Mihir Dalal in Bangalore; Editing by Lisa Von Ahn and Maureen Bavdek