September 3, 2013

Microsoft buying Nokia's smartphone business for $7.2B

By Matti Huuhtanen / The Associated Press

(Continued from page 1)

The acquisition is being made at the same time that Microsoft is looking for a new leader. Just 10 days ago, Ballmer, 57, announced he will relinquish the CEO reins within the next year in a move that many analysts regarded as Microsoft's tacit admission that the company needed an infusion of fresh blood to revitalize itself.

Nokia said that Stephen Elop will step down as president and CEO of the company with board chairman Risto Siilasmaa taking over his duties as an interim CEO.

The deal has fueled speculation that Elop, a former Microsoft executive, will emerge as a top candidate to succeed Ballmer. He will become executive vice president of Nokia devices and services in preparation for joining Microsoft once the acquisition closes

The deal with Nokia represents the second most expensive acquisition in Microsoft's 38-year history, ranking behind an $8.5 billion purchase of Internet calling and video conferencing service Skype. Tony Bates, who ran Skype, is also regarded as a potential successor to Ballmer.

The money to buy Nokia's smartphones and patents will be drawn from the nearly $70 billion that Microsoft held in overseas accounts as of June 30.

Microsoft expansion into mobile devices hasn't fared well so far. Last year, the company began selling a line of tablets called Surface in hopes of undercutting Apple's iPad. The version of Surface running on a revamped version of Microsoft's Windows operating system fared so poorly that the company absorbed a $900 million charge in its last quarter to account for the flop.

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