Microsoft Nook Deal: Winners & Losers (Update 1)

"I think the joint venture it might wear on Amazon's Kindle sales over time, especially if Microsoft can execute a retail strategy. However, I don't think Amazon's sales are gonna fall off in the next two quarters," said Sozzi in a phone interview.

There have always been concerns about Amazon's margins for the Kindle Fire at the $199 price point. It's generally believed that Amazon sells the product at breakeven or a loss, though the online retail giant has not confirmed the cost of making the tablet, nor how many it sells. A strong partnership between Microsoft and Barnes & Noble may lead to a price war, which would further pressure Amazon's razor-thin margins.

Interested in more on Barnes & Noble? See TheStreet Ratings' report card for this stock.

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--Written by Chris Ciaccia in New York

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