Microsoft to buy Nokia?

Microsoft to buy Nokia?

The big rumor that’s been spreading across the Interwebs today is that Microsoft is looking to buy Nokia’s mobile division, just three months after the companies announced a partnership and just a week after Microsoft said it will acquire Skype for $8.5 billion.

The chatter started when influential and well-connected Russian analyst/blogger Eldar Murtazin wrote on his personal blog (Google translation | Bing translation) that negotiations are starting between Nokia and Microsoft, and a deal would close by the end of this year. “Both companies are very much in a hurry,” Murtazin wrote, according to the Google translation.

But the rumor seems quite odd, considering the companies just inked a deal worth billions of dollars to make Windows Phone the main operating system on Nokia smart phones. What more could Microsoft need from the world’s largest phone maker? Hardware? Really?

Nevertheless, Murtazin has a stellar track record on Nokia rumors. He forecast the Microsoft-Nokia partnership long ago, when most pundits were convinced Nokia would stick to its Symbian platform, The Guardian of London reports. More recently, he predicted Nokia would ditch the Ovi brand, which the Finnish company did today. And last year, Nokia even sued Murtazin for possession of an unauthorized prototype – so he clearly has connections.


What’s fascinating about this rumor is the numbers. After last week’s $8.5 billion Skype acquisition, Microsoft has about $32 billion left in cash reserves. And, as The Guardian points out, Nokia’s market capitalization is just shy of $32 billion. Coincidence?

Interestingly, Nokia’s market valuation plummeted to that level in recent months. Before the Windows Phone partnership was announced, Nokia’s market cap was about $44 billion. Manipulation?