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This story is from March 6, 2014

Nadella, Gates were against Microsoft-Nokia deal: Report

Microsoft founder Bill Gates and new CEO Satya Nadella were reportedly against the Nokia buyout, as were many other unnamed board members.
Nadella, Gates were against Microsoft-Nokia deal: Report
NEW DELHI: Microsoft’s acquisition of Nokia is close to completion, but a new report says that this deal is one of the major reasons behind Steve Ballmer’s early exit from the world’s biggest software maker.
A report in Bloomberg Businessweek claims that Microsoft founder Bill Gates and new CEO Satya Nadella were against Nokia buyout, as was Skype founder Tony Bates and many other unnamed board members.
Later, Nadella changed his stance and supported the deal; Bates remained firm against the acquisition.
Bill Gates and others were against moving into the smartphone business, as part of the bigger ongoing debate about its experience in the hardware business. Despite the market share of Xbox One, it is not a profitable division for Microsoft. Similarly, the Surface tablets have not attained much success in the tablet market.
Despite the Nokia deal getting the nod later, Ballmer lost the favour of the board. Bloomberg Businessweek says, “Concerns over Microsoft’s direction had been mounting for months. For some directors, the question was whether Ballmer should still lead, according to people close to the board.”
The report says that during a meeting in June, when told that the board would not back his plan to acquire Nokia, he shouted that he would not remain CEO unless he got his way. He was “so loud that day that his shouts could be heard outside the conference room.”
Ballmer’s initial plan was to acquire Nokia’s handset business as well as its mapping unit. In the end, though, Microsoft only acquired the mobile division, and only licensed the Here Maps from Nokia. The Microsoft Board reportedly rejected the first deal as too expensive and complex, including not only the handset division but also a mapping unit Microsoft didn’t need.

In fact, the relationship between Bill Gates and Steve Ballmer, who are long-time friends, soured so much that they refused to share the stage together in November’s shareholder meeting. Microsoft general counsel Brad Smith had to intervene to get them to appear onstage together, says the report.
Ballmer’s reason for emphasizing on the Nokia buyout was that the Finnish manufacturer had been “dropping hints it might start making devices to run on Google’s Android platform. Ballmer needed a way to keep Nokia in Microsoft’s world.” Nokia makes nearly 80% of the devices running Microsoft’s Windows Phone 8 operating system.
At the Mobile World Congress in February 2013, Ballmer approached Nokia’s then-chairman Risto Siilasmaa about the acquisition. As talks progressed, Microsoft took a charge of $900 million over poor sales of Surface tablets, which underlined concerns about its prospects in the hardware business.
A few months later, Ballmer shocked everyone – including his leadership team – with the announcement of his early departure from Microsoft. A few minutes before making the announcement, he had called up Nokia’s Siilasmaa and then-CEO Stephen Elop about his retirement to “reassure them Microsoft remained committed to the deal.” They were the only two outsiders to be informed of this announcement.
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About the Author
Ravi Sharma

A geek at heart, I love to tinker with gadgets of all types and learn about upcoming technologies. A firm believer in the power of social media and apps, I am of the view that well-executed consumer technologies can help solve most problems that we face today. When not engrossed in the world of gadgets and apps, you would most probably find me reading a graphic novel, watching a movie or listening to The Beatles

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