Linked by Thom Holwerda on Thu 20th Jun 2013 18:29 UTC, submitted by MOS6510
PDAs, Cellphones, Wireless So, The Wall Street Journal is reporting that Microsoft was very close to take over Nokia, but that the talks eventually broke down, probably beyond repair - at least for now. The reasons the talks broke down illustrate something that I have repeatedly tried to make clear for a long time now: Nokia isn't doing well.
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tylerdurden
Member since:
2009-03-17

That is a 5 year contract. So it comes down to a bit over $200 million per year. And it is mainly in the form of "funny" money (cross licensing, ad money MS has to sink anyway to promote WP, etc). Microsoft actually recoups part of it, because Nokia still has to pay on a per phone licensing basis, and they get access to some of Nokia's key tech in that space (mainly the navigation technologies).

So it is a great investment as far as microsoft is concerned: they get to take control of a 15 billion market caped company for peanuts basically, while they are shielded from the risk in case Nokia goes south (which they would be on the hook for, if they had acquired them directly). Honestly, it's a much more intelligent approach than google's right out purchase of motorola.

Edited 2013-06-21 00:20 UTC

Reply Parent Score: 9

bentoo Member since:
2012-09-21

Nope. The quarterly "platform support" payments are definitely in cash, not "funny money." Even if they pay back the total amount in licensing fees it's still a net gain for Nokia.

Reply Parent Score: 4

tylerdurden Member since:
2009-03-17

Can you provide a reference to the actual structure of the contract? I have heard otherwise.

Microsoft is most definitively known as a profitable entity, not a charity.

Edited 2013-06-21 05:16 UTC

Reply Parent Score: 2

cdude Member since:
2008-09-21

Actually past quarters Nokia's license fees where higher then the platform-support payments received from Microsoft.

Reply Parent Score: 5