After dumping its Zune music player product and its Kin phone hardware, it shouldn't be a surprise to see Microsoft closing down its e-Book reader. Amazon and Apple seem to have sewn up that market, and Microsoft hasn't bothered to invest in any significant competition.
At least with the Zune, MSFT tried to create both a music marketplace and a sense of buzz. The e-Book platform seems to have been launched in an expectation that because Microsoft did it, everyone would accept it as a standard, and it would naturally succeed due to fear of competition. This sort of reasoning certainly can't have much currency after the fading of wma-encrypted DRM music as a "standard" just because MSFT was selling it.
MSFT seems to be concentrating on a smaller number of core platforms and software where it's still competing: operating systems for desktop, notebook, and phone hardware; and software for its platforms (either to run on the platforms, or to support them on the back-end). Microsoft's server products have significant revenue – Exchange and IIS are major back-end products licensed at great expense by major corporations – but Netcraft's current web server graphs show that Microsoft's competition from free competition may be denying it share in the growing market even as Microsoft's revenue continues to be rich. (MSFT had once a share approaching 40% of the web server market, but MSFT's IIS now appears to have less than 20% of the web server market and is losing share. Among the million busiest sites, Microsoft's share has been less volatile but is on a steady decline.) The effect of free software's increasing capability on Microsoft's licensing outlook will turn on things like Microsoft's ability to make use of third-party tools seem burdensome and hostile to users and administrators. Microsoft's ability to do this with impunity will turn in some part on the availability of alternatives to Outlook, which customers typically use to access mail, calendar, and contact information for which Microsoft offers back-end management through its Exchange product.
If anyone has information on email server share that might offer for mailservers what Netcraft offers for web servers, I'd love to see that data.