Nokia quashes rumours of acquisition by Microsoft

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Yesterday at the D9 conference Stephen Elop, Nokia's CEO, quashed recent rumours that Nokia was set to be acquired by Microsoft. In response to a question about whether Microsoft was interested in buying Nokia's hardware division Elop said that, "the rumours are baseless", reinforcing an interview had had given to CNBC earlier in the day and statements that Nokia had released to the media.

The idea of Microsoft acquiring Nokia has been widely discussed followed the companies' announcement of their partnership on February 11th of this year. While such an idea can never be completely ruled out, such discussions tended to ignore the legal and business practicalities of such a move. Moreover, it was difficult to see what either company would gain, that could not be achieved through the already announced close strategic partnership.

Despite this, in the last few weeks, unsubstantiated rumours emerged suggesting talks about an acquisition were getting underway or had been completed. As the final act, yesterday, a rumour emerged that Microsoft was to buy Nokia for $19 billion. See anatomy of a rumour for more.

Nokia moved to quash the rumour after it gained widespread media coverage and led to a high volume of trading in Nokia shares. It is worth noting that corporate disclosure law requirements means that Nokia's statements on the subject should be taken at face value.

Video from D9 Conference

During his appearance at the D9 conference Elop also briefly showed an unreleased Nokia device. While Elop has noted in previous statement that he is carrying a device running Windows Phone on Nokia hardware, Nokia Conversations notes that this particular device is not running Windows Phone. This suggests it might be an upcoming MeeGo or Symbian device. 

Elop also addresses why Symbian can't be the basis for the future, saying, "it would take too long to update", and that as a consequence of its long history it is a bit "crufty" and talks about the decision to move to Windows Phone. 


Interview with CNBC

Stephen Elop spoke to CNBC, a US television channel, where he made an even more unamibiguous statement:


Let's clear this up. Are you talking to Microsoft about selling the company or not right now?

Stpehn Elop:

No. those rumors are baseless. There are no conversations. 


You're not talking about selling the phone business? You're not having any conversations, beyond the fact that you've got this deal with Microsoft to develop these Windows-based phones that will be out sometime later this year? That's it? 

Stephen Elop:

That is correct. There are no conversations of that nature going on. We are focused on the strategic announcement that we made in February and executing on the strategy. There is nothing beyond that.

Anatomy of a rumour

While there's been talk of the possibility of Microsoft acquiring Nokia ever since the February 11th announcement, yesterday's rumour started from a single tweet posted by Eldar Murtazin, which itself was a follow up to an earlier post on his personal blog. 

Murtazin is the editor of mobile-review, which has a history of posting early device reviews, often based on prototype products. Last year he faced legal action from Nokia over what the company described as the 'possession of unauthorised Nokia prototypes and other intellectual property'; Murtazin subsequently denied any wrong doing. The incident, which came off the back of a number of controversial incidents, sparked a great deal of debate, but whatever conclusion you choose to draw it is clear there's enough history between the two parties to give grounds for caution in assessing any rumours. 

Murtazin's tweet was subsequently picked up by, which used the headline "Microsoft strikes deal to acquire Nokia’s phone business for $19B, insider claims". The story was then picked up by other blogs and some mainstream media. In the space of a few hours the story had taken on a life of its own. Consequently, as we saw above, Nokia moved quickly to quash the rumour, but it's a good illustration of how quickly a rumour can spread and a rather damning indictment on the media that this can occur from a single unconfirmed tweet.