Microsoft has invested $300m (£185m) in a digital venture with US bookseller Barnes and Noble.
The deal could make Barnes and Noble's Nook e-book reader available to millions of new customers, integrating it with the Microsoft's new Windows 8 operating system.
The as-yet unnamed new company will be 82.4% owned by Barnes and Noble, with Microsoft getting a 17.6% stake.
The news caused the book store chain's shares to double in pre-market trading.
Barnes & Noble shares were up 92%, while Microsoft increased by less than 1%.
The new joint venture will be be home to the bookseller's digital and college businesses.
The Nook e-reader was launched in 2009 to compete with Amazon's Kindle, allowing users to buy, download and read digital versions of books and magazines.
Its content will now be available to the growing number of people with mobile devices running Microsoft software.
"Microsoft's investment in Newco [the new digital and college unit], and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform and its hundreds of millions of users, will allow us to significantly expand the business," said William Lynch, chief executive of Barnes & Noble.
Microsoft's new Windows 8 operating system - due to launch this autumn - is specifically designed to work with touch screens and mobile devices like tablet computers.
Its Metro user interface can host small dedicated applications like Nook to sit on top of Windows.
Amazon's Kindle service is already available as a Windows 8 app.
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