Barnes & Noble is spinning off its college-textbook and digital divisions into a new subsidiary, bolstered by a $300-million investment by Microsoft, that is aimed at turning more college students on to electronic textbooks.

The partnership, which officials announced on Monday as the two companies were settling a patent dispute, isn't likely to change the day-to-day operations of the nearly 700 campus bookstores that are managed by Barnes & Noble, said Jamie Iannone, president of Barnes & Noble Digital Projects. But he said it should "accelerate the adoption of e-reading in the college space."

Even though e-textbooks make up a small portion of the bookseller's business, that market is likely to grow in the next several years, and teaming up with Microsoft will strengthen its ability to grab a larger share of the college bookstore market, Mr. Iannone said. One of the first new features the joint venture will offer is a Windows 8 application for Nook, Barnes & Noble's e-book reader.

The new subsidiary, which has yet to be named, is being referred to for the time being as Newco. Barnes & Noble will own 82.4 percent of the venture, and Microsoft will have 17.6 percent...