>> susie: i'm susie gharib. tonight, a new chapter for microsoft-- taking a big stake in barnes and noble's e-reader, the nook. >> tom: i'm tom hudson. facebook is changing how american does business. we begin a week long look at facebook economy. and while gas prices remain high, it looks like they won't drive us back into recession. that and more tonight on nbr! this is "nightly business captioning sponsored by wpbt >> tom: we begin with microsoft and the book business. the software giant is investing $300 million in barnes and noble's nook electronic reader business. erika miller reports the deal is the latest battle ground over books and tablet computers. >> reporter: this... is slowly being replaced by this.

the switch from print to pixels is the biggest revolution in book publishing since gutenberg invented the printing press. this creates a challenge for barnes and noble-- the largest book retailer in the u.s. and the maker of the nook e-reader. in the u.s. e-reader category, barnes and noble has staked its territory with an estimated 27% of e-book sales. however, in the broader tablet market, the nook is dwarfed by apple's ipad. but today's deal puts to bed concerns that barnes and noble lacks enough money to compete in the big leagues. >> today, you get a much larger, strategic partner in microsoft that believes in it and is willing to put their money where their mouth is. i think that makes barnes & noble a much more relevant competitor. >> reporter: but microsoft and barnes and noble seem like unlikely allies. for over a year, the companies have openly funded about patents related to the nook. but with this new strategic agreement, that dispute is put to rest. so what's in this deal for microsoft? first, it gains a foothold in the growing e-reader market.

>> microsoft is really late to the party in that it doesn't have an e-book presence-- really at all-- where amazon, google >> reporter: there will be a nook application for windows 8-- microsoft's new operating system that will be unveiled in june. the nook currently runs on google's android operating system. there's speculation the nook could change to window's 8 down the road. erika miller, "nightly business report," new york. >> susie: still ahead, we have more about this deal between barnes and noble and microsoft. and what it means for the biggest book seller: amazon.com. >> susie: barnes and noble

shares skyrocketed on news of today's microsoft investment up over 50%. but tom, that enthusiasm didn't spread to the rest of wall street. >> tom: susie, word that spain has officially entered recession, set the tone for u.s. trading today. the dow fell almost 15, the nasdaq lost 22. the s&p down five. >> susie: more on our top story, microsoft's $300 million investment in barnes and noble's nook business. media analyst john tinker of maxim group joins us. john, between the microsoft backing and the $300 million, is this enough to make the nook a serious player in a very competitive arena? >> well, i would reverse the question and say the nook has been backed by a small company that in the tech world no one has heard of, they actually have a better product than amazon. they've done a stunning job. the problem is they don't have the resources.

what you can now do is take their superior product and actually give it some back. and that is obviously a game changer. >> susie: well, this deal is certainly a financial lifeline for barns & noble which has been lossing a lot of money. how much time does this buy barns & noble to make changes, do new things? >> well, microsoft has actually committed a further $305 million on a nonrefundable basis, between a 3 and 5 year period so i would say this is the beginning of a major long-term relationship. >> susie: and what does it mean for microsoft? what does it stand to gain or lose? >> well, windows 8 is very important for them. in that they are now perhaps seen as a tired company, google is far mo agressive and obviously you will be discussing facebook later which is very aggressive. so they really need to stay in the game. and this is a chance for them which is a very little-- because this is a

bats el between-- for them it is very cheaply get in the game and then figure out what they really want to do. >> susie: and what about amazon. here it is the biggest bookseller out there, also got its kindl fire which is doing really well. how much of a threat is this to amazon? >> well, they are the big gorilla in the space still. but everybody now knows how they operate. and it's going to be far harder for them to get away with some of their practise. there was a recently anti-trust case which muddied the waters a little against apple and some of the book publishers. i would say that people are now targeting them. >> susie: if you look out a few years whos are winners, who are the losers, of all the players existing right now? >> it will be hard to see amazon not be in the picture. but what is interesting about the joint venture with microsoft is they haven't yet named it. the obvious name would be nook but they haven't used that. so it will be interesting to

see what vehicle they really create but i will anticipate that will do well swz all right, john, thank soches. dow have any disclosures to make? >> no. >> susie: all right, john tinker of maxim group. >> thank you. >> tom: monday's are known for merger announcements and rumors. it wasn't just microsoft's investment in barnes and noble. first, the rumor: coca-cola late today denied it was in talks to buy monster beverage. there were reports out during the day that coke was negotiating what would be its biggest brand buyout, probably over $11 billion. after closing in the mid-$60 range last week, the rumors pushed monster stock up to almost $84 dollars per share, before tumbled just before the closing bell when coke denied the deal. in energy, sunoco shareholders will get more than $50 per share from pipeline operator energy transfer partners. the deal expands energy transfer's network of oil and gasoline pipelines. as part of the deal, energy

transfer picks up sunoco's $4,900 gas stations in the u.s. sunoco stock shot up more than 20%. there was also a multi-billion dollar deal in the medical tech field. hologic will buy gen-probe in a cash deal with $3.7 billion. the deal will expand hologic's medical diagnostic test products. gen-probe shareholders are due to get $82.75 per share. the offer sent gen-probe shares soaring, up almost 20%, closing shy of the buyout offer. hologix took a hit of 10%. falling to their lowest price since january. >> tom: it's the most anticipated stock offering in

years and likely will be one of the biggest. facebook. as the company prepares to sell shares to the public, we examine what has become the facebook economy. all this week we will report on the website's impact from farm fields to state finances. what started in a college dorm room has grown to reach almost one billion people in a new form of media. it adds up to a huge business opportunity. darren gersh begins our series. >> reporter: you'd expect a company that busts myths and seeks out danger to like living on the cutting edge. which is why discovery communications is not just embracing social media, it is building facebook into its products. >> instead of just layering social on top of existing products, we're actually threading social into how products are being created, in our case entertainment. >> reporter: just look at "what

not to wear", a tlc hit. >> we're very heavy on facebook because that's where our fans are. >> reporter: the makeover recipient in next month's season premiere was introduced on facebook in march. fans voted on outfits and hairstyles, too. did i mention that "what not to wear" has one million facebook fans? and those fans are connected to a potential audience of 155 million people. that's good for facebook, but discovery's goal is to drive those users to its websites where it sells advertising. >> we asked our fans to tell us what they thought of this particular photo that was uploaded. >> reporter: the app is called keep it or toss it. fans upload photos. and referrals from facebook to discovery sites like this? they're up 200% year over year. but here's a big question about facebook. if you are doing a cool fashion show, it's easy to attract people. but what if you're trying to sell toothpaste or tires?

>> the question every marketer is asking is while people are on facebook, do they want to learn about new products and services and then buy them? >> reporter: the answer isn't clear yet. the goal is to turn social interactions into purchases. but it takes patience. before companies can make a social media sale, they need to identify who they want to talk to and why. >> if somebody establishes a relationship with you, when they go to make a purchase decision and you're already in that channel, you have them. right, you're able to talk directly to them when they're about to make that purchase. >> reporter: it may turn out facebook ends up being just a great place to market your brand. but companies trying to sell directly to consumers will go to a search company like google. if so, facebook could be overhyped. >> i think a lot of people are pricing into this $100 billion valuation the belief that facebook is going to be a google-killer and they are selling fundamentally different kinds of advertising. >> reporter: but with 900 million users, facebook is so

big it is almost an alternate internet. most of what people want online, photos, videos, news. they can find without ever leaving facebook. >> i do think social in and of itself is becoming an entertainment channel. but i think it is converging with television and it's making the experience of television, which has always been a social one, it's making it even more intensely so. >> reporter: as we spend more time on facebook, facebook knows more and more about us. and as facebook uses that to personalize our online experience, telling us what we like before even we know. so social media may not just be built into our products, more and more it may select them, too. darren gersh, "nightly business report," washington. >> susie: for more on the facebook economy, we turn to david kirkpatrick, author of the "facebook effect." david, how wide range doing you see this facebook

economy so to speak? >> well, if more than half of all americans are on facebook, the economy is huge. and i mean if you look at it globally and where it is going, i believe it will easily get to 2 billion on facebook before too long. you know, and all the people with money are basically on facebook in every major economy. so what you have is a targetable medium which is unprecedented and that is huge. plus as you pointed out there is sort of like an alternate internet happening here because people go into facebook and they don't really come out, a lot of the time suses well, we know that so many companies like coca-cola or starbucks are using facebook as a way to test their offerings and to communicate with their customers in a new way. once facebook goes public does it, is there a multiplier effect? is there a whole new world that opens up and new businesses that will take advantage of facebook? >> well, i think it's happening anyway. i think the ipo will give

facebook more resources in order to remain viable and grow even fast never terms of its capable its. but one of the things that i think is going to happen is the connection between the customer and the vendor is getting so tight on facebook, that you are going to start seeing more of what we call cocreation. that the companies with their product, they're not just going to be throwing things at us and saying buy t they're going to be asking us what should they make and people are very eager to tell them. and by the way, companies have to be very authentic and honest in order to succeed in this environment which is a very big challenge for a lot of companies. >> susie: when you wrote your book, you spent a lot of time with mark zuckerberg, the founder of facebook. what is your sense of what his thinking is now. what is the next new direction for this company? what does he want? >> well, his goals really haven't changed. he's still trying to make facebook reach out to literally everyone on the planet. he believes that what he is building is a communications

tool that is fundamentally empowering and really ought to be used by everyone. so even more than making profit which is an important caution that investors need to have when they buy the stock, his goal is growing the company, growing the surface, making it possible for even more people in more places to use it. that's what he wakes up every morning believing that he wants to to do that he has to do. he's passionate about that. >> susie: so the profitability even though it's going to be a public company is less important to him than its impact of being important s that what you are saying? >> well, but i think he does see them as connected. he believes that if investors will just let him keep growing this thing and he has a tremendous track record for having done it so far, that the money will fochlt and all the evidence suggests that he's right. >> all right, thank you very much. david kirkpatrick, author of the facebook effect. >> tom: our look at the facebook economy continues tomorrow. we head to california, facebook's home base. the state budget there is billions of dollars in the red.

but it could see millions in new tax dollars from the facebook stock sale. chrysler will add a third in a detroit factory thanks to revved up demand for jeep grand cherokee. more than 1,000 workers will begin the extra shifts in november rather than next year. and that same plant will now remain open this summer during at that time decisional two week shutdown. now just last week the automaker reported first-quarter profit of nearly $500 million. that's its best quarter

since exiting bankruptcy in 2009. and tom, we're going to get a better picture of how chrysler is doing tomorrow. that's when the nation's automakers post their april sales numbers it. >> tom: u.s. sales have been a bright spot for those equipment manufacturers like chrysler, gm and ford especially in light of the slowdown we have seen lately in the europe. and you know, in our market focus, it was despite the monday merger news that we had, the major stock indices finished this month of april in the red, down for the first month for the dow and s&p 500 since last fall. after weak trading in europe as spain slipped into a recession, u.s. stocks saw selling pressure throughout the day. the s&p 500 hit its lowest price of the session about an hour and a half before the closing bell. today's losses were powered by selling in the technology, industrials and materials sectors, each falling more than a half percent. technology has been the best sector this year, but its also lived up to its volatile reputation. even apple has continued to see wide price swings. apple's 3% drop led the tech sector lower.

last week, shares re-gained $600 per share after its stellar earnings report, but today we some light volume selling with shares below $600. limiting the losses on the dow were a couple of more defensive names for investors. drug maker merck and food company kraft foods were the best percentage gainers inside the dow industrials. merck gained two percent while kraft was up one percent. both are at new 52 week highs tonight. caterpillar shares were among the biggest losers in the dow, falling almost 2%. this is a two and a half week low. the company is preparing for a labor strike as soon as tomorrow at a plant in joilet, illinois. managers and retirees will be used to maintain production of parts for construction and mining equipment. the local international association of machinists rejected caterpillar's latest offer. but health insurance provider humana was not place to hide today. earnings came up well short of analyst estimates, earning four cents less than expected. humana is the country's biggest provide of medicare plans.

the firm's higher medical costs are on the rise after customers held off on medical treatment during the recession. shares were sickly today, falling 8% as volume more than quadrupled. among the reasons humana cites for higher medical claims: leap year, one extra day in february, new requirements due to the health care reform law and servicing more customers. this is humana's lowest price since october. deal of the day website groupon has had a tough go since becoming a public company in november. the firm has been be-set by accounting questions and worries about its financial controls. the stock is at its lowest point of its young life, down 10.5% today. it replaced two exiting board of directors members with two accounting experts in its latest effort to address investor worries over its financial operations. natural gas has been heating up some after dropping to a decade low earlier this month. the warmer than usual winter and historically high supplies pushed natural gas prices down by about 50% in the past five months.

but we've seen some buying interest come back into the market over the past week or so. it could be traders covering short positions, thinking prices won't fall much further or value players getting into the market expecting demand to pick up as the economy strengthens. looking at our exchange traded fund market flash, the spiders, financial sector, emerging market and nasdaq 100 funds fell less than 1% each. the russell 2,000 e.t.f. shed more than 1%. and that's tonight's "market focus."

>> tom: tonight's word on the street is technology. it's been one of the strongest areas of the stock market this year. jill malandrino is with thestreet.com. >> tom: jill, sinces the beginning of the year showing the tech sector is the best sector, double-digit gains, 19% higher, a close second financial 18 and a half hearst higher, are the easy gains are teches over. >> i think this is still a lot of momentum. let's look at the market ket. q1 at over 12% growth just for that quarter a lochblt we expected some chopi innocence for q2 but thattive gos investors a better entry point to get involved. i think the momentum for tech is certainly going to continue. it's the best performing sector out there. 19.8% advancing year-over-year. >> tom: it's been a place where a lot of money has gone noorx but do you go big tech or think small tech. we've seen the volatility with app el lately. do you think more smaller players. >> i'm looking at the big tech names.

i look at is i want those really healthy balance sheets. i want managements that are executing and firing on all cylinders. rewarding investors with the cash, putting it towards share buybacks. rewarding them. this is what going to happen. if we have a market downturn with healthy companies with cash on balance that are investing in the right sectors is what is really going reward investors. >> tom: is there is a power-- powerful combination. you have the growth prospects of technology, cash rich beginning to return some of that money in the form of dividends, something the technology companies are were loathe to do in year's past. >> uh-huh so, if we take a look at a name such as ibm which happens to be my large cap tech pick not only were they fire on all cylinders but the metrics before, look at their q1 report, they came in healthy. they guided really good for the back half of the year. they increased their share buyback to $7 billion through 2015 and cut that dividend over 13% to 85% each quarter. so not only do you have a chance to get involved as a momentum trader, as a

long-term investor, you're getting rewarded. >> the stock price here just over 200 per share is that a good entry price and if so what is your price target before the end of the year. >> i say 200 or below is a better price to get involved with. if you are more of a momentum guy. if are you a long-term investor get involved now. this company is not going to dispoint being a quality holding in your core portfolio because are you going get paid with that healthy dividend and companies committed to buying back shares. i think is a great spot to get in even over the 200 level. and i think by the end of the year we could see 215, 220 and still get that dividend. >> another 10% move here possibly from this point. dow own any yourself, jill. >> i do not. >> jill malan din-- malan sdrino with the word on the street, jill is with the street.com. >> susie: tomorrow on n.b.r.: getting paid to be a shareholder; the latest on buying dividend paying stocks; avon, the troubled door to door cosmetics company reports quarterly results. and we check in on america's number one trading partner and

our neighbor to the north canada. >> tom: the economy may be cooling off as summer heats up, but don't blame gasoline prices. so says tonight's commentator. dan gross is a columnist at yahoo finance and author of "better, stronger, faster: the myth of american decline and the rise of a new economy." >> as summer approaches, concern over high gas prices is rising to a fever pitch. but maybe we shouldn't worry so much, here's why: first, gas prices this week are actually lower than they were a year ago. second, elevated gas prices are not taking a bite out of retail sales. they were up 0.8% in march, and up 6.4% in the first quarter of 2012 from last year. yes, american consumers are spending more at the pump, but they're also spending more at the mall, and on e-commerce sites. when it comes to consumer spending, growth plainly trumps gasoline. and third, rather than inhibit

car sales, higher gas prices now actually spur them. why? well, americans have never had a greater variety of fuel- efficient cars to choose from: hybrids, electric vehicles, clean diesel. general motors, which several years ago was pitching hummers, in march sold 100,000 cars that got more than 30 miles per gallon. with each passing day, the american driver is more insulated from higher gas prices. and that's true for the economy at large. the energy department says gasoline demand this summer is likely to fall to 8.8 million barrels per day-- that's the lowest it has been since 2001. we may have a problem with slowing growth this year, but high gas costs won't be the reason. i'm daniel gross. >> susie: and finally tonight, a milestone for lower manhattan as the freedom tower rises to new heights. the tower at one world trade center surpassed the empire state building as manhattan's tallest sky scraper, rising above 1,250 feet today. when completed in 2015, the tower will be nearly 1,800 feet

high with 104 stories, making it the tallest building in the u.s. and one of the tallest in world. tom, it's quite the comeback. >> and before we leave and sign off for tonight, i hope our viewers have noticed that we have a new look, new music, new graphic. we're excited about it we hope are you too. please let us know. >> tom: a bit of our own milestone. have a great evening. see everybody on-line at nbr.com. and right back here tomorrow night. "nightly business report" is made possible by: captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org

>> susie: join us online at nbr.com. there, you'll find full episodes of the program.