Did Microsoft just dodge another bullet, this time with Nokia?

Summary:Microsoft supposedly has walked away from 'advanced' talks to buy Windows Phone partner Nokia. Will this look like Redmond's choice to abandon its Yahoo buy-out, in hindsight?

Remember when Microsoft very nearly bought Yahoo for close to $50 billion? Months after that deal fizzled, Microsoft execs were quick to claim credit for dodging that bullet.

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On June 19, the Wall Street Journal reported that Microsoft was in "advanced" talks to buy Nokia. But, according to The Journal, the talks have broken down and are unlikely to be resumed. The Journal's report follows by a day another report that Huawei might be considering buying Nokia .

I am not a Nokia hater. As one of the three percent who own a Windows Phone (by choice, not obligation), I am glad there's a handset maker out there championing the Windows Phone platform. I haven't loved the Nokia phones I've seen to date -- and that's why I currently sport an HTC 8X. (The weight/bulkiness of the Nokia Lumia line, coupled with Nokia's AT&T-first policies have put me off, as I am a Verizon user.)

All that said, I am not surprised Microsoft may have dropped the idea of buying Nokia. Yes, I understand Microsoft is working to transform itself into a devices and services company. And so far, it doesn't have a whole lot of devices in its portfolio beyond its Surfaces, Perceptive Pixel displays and the Xbox.

But just as in the case of Yahoo, there's a lot of parts of Nokia that Microsoft may not really have wanted or needed. In Yahoo's case, there was lots of product overlap and job function redundancy.

In Nokia's case, while I'm sure Microsoft would be happy to grab some more camera patents, the Redmondians already have in place sweeping cross-licensing agreements with Nokia. Did Microsoft really want to pick up the Asha line of phones that are designed not to run the Windows Phone OS? Did Microsoft want all the trappings -- not to mention staff -- of a phone design and manufacturing operation?

Nokia already makes, for most intents and purposes, Microsoft's Windows Phone. Did Microsoft need to shell out billions to cement that relationship? Seemingly not. Does this mean Microsoft is now even more likely to market its own (possibly Surface-branded) phone? Perhaps....

Topics: Mobility, Microsoft, Nokia, Windows Phone

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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