Microsoft Corp will invest $300 million in Barnes & Noble Inc’s digital and college businesses, valuing them at $1.7 billion.

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, to be named Newco, 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’soperating system.

(Msnbc.com is a joint venture of Microsoft and NBCUniversal.)

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.

The deal gives Barnes & Noble ammunition to fend off shareholders who have agitated for a sale of the Nook business or the whole company. For Microsoft, it represents a move into the e-book business, which has been targeted by Amazon.com, Apple Inc. and Google Inc.

The companies said that the subsidiary will have an ongoing relationship with Barnes & Noble’s retail stores, but what that relationship will be is unclear.

Barnes & Noble, based in New York, currently runs 691 bookstores in 50 states. A representative for the company could not be immediately reached for comment.

The possibility of a separation of Barnes & Noble’s digital and college businesses has been brewing recently. In March private investment firm G Asset Management, a Barnes & Noble shareholder, offered $460 million for a 51 percent stake in the company’s college bookstore unit, Banes & Noble College Booksellers LLC.

Under that plan, the college bookstore unit was proposed to begin as a private business but become public within a “reasonable” amount of time. G Asset’s offer was contingent upon Barnes & Noble keeping current management in place and separating its Nook e-business from the rest of the company. At the time the offer was made, Barnes & Noble declined to comment.

In 2009, Barnes & Noble Inc. bought the college bookstore unit from Chairman Leonard Riggio in a deal worth $596 million. The deal ended up costing Barnes & Noble $460 million after accounting for the unit’s cash on hand at the closing date.

Barnes & Noble is looking to maximize the potential of its Nook e-book readers. The New York company has tried to adjust to a noticeable shift in book reading habits, with e-book readers becoming increasingly popular with consumers over traditional hardcover or paperback books. But Barnes & Noble is dealing with tough competition on that end from the likes of Amazon.com Inc.’s Kindle and others.

One of the benefits of reading ebooks is the access to many free classics.  As with all ebooks, these can be downloaded easily and quickly without leaving home.  When you choose to utilize the out-of-copyright ebooks, you be able to discover or reconnect with some of the best-loved novels of all time.   The following are some favorites to consider adding to your free ebook library.

The Adventures of Tom Sawyer by Mark Twain is an endearing story that will engross both children and adults.   Written in 1876, this classic is filled with cliffhangers and valuable lessons.

Little Women by Louisa May Alcott is a heart-warming tale following the March sisters as they embark upon womanhood during the Civil War.   Published in 1868, this story sweetly displays the many sides of human nature.

Dracula by Bram Stoker was written in 1897 and follows Jonathan Hawker as he visits the Transylvanian castle of Count Dracula.  Horror and suspense fill this creepy vampire tale.

Alice’s Adventures in Wonderland by Lewis Carroll is perhaps best known as a movie or cultural icon, however many will take pleasure in reading the timeless work that was first published in 1865.  Children of all ages will enjoy visiting this fantasy world and meeting its unique characters.

Great Expectations by Charles Dickens trails orphan, Pip, and escaped convict, Magwitch, through an experience that will impact both of their lives.  This masterpiece has been captivating readers since its first publication in 1860.

Pride and Prejudice by Jane Austen takes readers back to a bygone era filled with brilliant characters and plot twists in this timeless romantic comedy.  It is still as influential and relevant as it was when it was first published over 200 years ago.

In one of William Shakespeare’s most beloved plays, revisit star-crossed lovers, Romeo and Juliet, in this heart-breaking tragedy of a love that cannot be fulfilled.  The feud between the Capulet and Montague families is the cause of many deaths in Verona, Italy.

A murderer’s guilt drives the narrator to paranoid madness in Edgar Allan Poe’s short story, The Tell Tale Heart.  It’s a quick read for a creepy evening.

Sir Arthur Conan Doyle’s Adventures of Sherlock Holmes is a compilation of 12 exciting mysteries set in 19^th century London.  Try to match deduction skills with the brilliant detective Holmes.

Become immersed in a tropical land of Jolly Rodgers, sea shanties, buried gold and peg-legged pirates donning parrots on their shoulders in Robert Louis Stevenson’s Treasure Island. Travel with young narrator Jim Hawkins to find adventure and treasure in this captivating novel.

The Importance of Being Earnest by Oscar Wilde is as humorous today as it was when it was first published over 100 years ago.  Mistaken identities, puns, wit and sarcasm abound in this delightful play.

The science fiction novel, War of the Worlds by H. G. Wells, is one of the earliest stories about a clash Martians and humans.  Written in a journalistic style, this fantastic account of an alien invasion is as fast-paced and suspenseful as it is reflective and philosophical.

There are many more enjoyable classics to be downloaded for free, such as works by Leo Tolstoy, Franz Kafka, Homer, Walt Whitman, Henry David Thoreau, Agatha Christie, Plato, Herman Melville, and many others.   These out-of-copyright classics can be found at: guntenberg.org., forgottenbooks.org, free-ebooks.net, and manybooks.net.   Happy free ereading!