Microsoft to Buy Nokia?

A report by a Russian blogger with good sources inside Nokia has prompted rumors that Microsoft is looking to buy the Finnish giant‘s phone business. Nokia denies the rumor.

The blogger, Edlar Murtazin, has a good track record: he predicted the Microsoft-Nokia partnership as long ago as December. Now he says that next week, Nokia will begin talks about the sales of the unit to Microsoft. The deal could close before the end of 2011. “Both companies are in a big hurry,” he writes (in Russian).

These sorts of rumors have surfaced in the past, but never in the context of an abandonment by Nokia of Symbian and an embrace of Microsoft as Nokia's key smart phone operating system.

On the other hand, some will question the logic. Microsoft always has preferred an "open" approach where its operating system can be freely licensed by many other hardware providers. Buying Nokia would put Microsoft into competition with its partners.

Buying Nokia would essentially put Nokia out of business. It isn't so clear that makes sense, either. And all such large acquisitions are fraught with integration risk. One hopes, for both companies, that the rumor is false.

Dissecting the Microsoft-Nokia Rumor