At $1.7 billion, Nook is worth more than Barnes & Noble itself

Microsoft (s MSFT) and Barnes & Noble (s BN) have buried the patent hatchet and teamed up to compete against Apple (s AAPL) and Amazon (s AMZN) in the eBooks business. The new partnership sees Microsoft investing $300 million in a new Barnes & Noble subsidiary. (My colleague Laura Owen has the complete breakdown of the deal over on paidContent.)

The $300 million investment in the  Nook subsidiary of Barnes & Noble gives Microsoft about 17.6 percent ownership of this business unit. That values this part of the business at about $1.7 billion. Before the markets opened this morning, the Nook business was valued about $900 million more than Barnes & Noble itself.

Update: Barnes & Noble stock zoomed at the opening bell – and is now trading at about $9 a share, giving Barnes and Noble a total market cap of $1.3 billion, which is still less than the Nook subsidiary itself.