updated 04:15 pm EST, Mon March 7, 2011
Rumor alleges Microsoft paid 1b to get Nokia deal
Microsoft may have paid $1 billion to help get Nokia using Windows Phone, a rumor alleged Monday. Nokia will reportedly still have to pay a license on every WP7 device it sells, but Microsoft will have paid at least some of the money even before the first device ships. The Bloomberg tip argued it was directly intended to prevent a possible deal with Google that would have seen a switch to Android instead.
Nokia was also partly inclined to choose WP7 simply because its rarity on the market made it stand out where Android was too generic and commoditized, the insiders said, reflecting public statements.
None of the companies involved have confirmed the direct payment. Microsoft has so far only said that cash would only go between the companies for ad and search revenue splits, marketing and the licensing fees. A $1 billion payout would either be an optimistic view of expected revenues or a direct attempt to outbid Google through a cash incentive.
New Nokia CEO Stephen Elop has repeatedly denied being a Trojan horse for Microsoft despite his former role at the Windows developer. The direct financing would support his view as it would suggest Microsoft couldn't have counted on Elop to give it special access.
It nonetheless paints Microsoft as determined to gain share for Windows Phone at all costs. CEO Steve Ballmer is known to have a personal obsession with thwarting Google that has seen the company lose hundreds of millions of dollars every quarter through Bing and other cloud services in an attempt to get a foothold. The concern has extended to mobile, and Microsoft has already been worried enough that it has been suing Android makers to hold them back, but only those like Motorola that haven't promised to make Windows Phone hardware.
Combined, Windows Phone and Windows Mobile have been rapidly losing share even despite the novelty of Windows Phone and Microsoft's $500 million fall ad campaign.