More cold water on Microsoft-Nokia ‘deal’

June 2, 2011, 7:06 PM UTC

Is Microsoft about to buy Nokia’s mobile unit for $19 billion? No, according to a senior source familiar with the situation (not to mention public denials from Nokia CEO Stephen Elop and PR reps for both companies). On the other hand, maybe Microsoft should take a run at Twitter…

On Tuesday, a Russian tech blogger named Eldar Murtazin tweeted the following:

Murtazin has some credibility from past tweets about the Microsoft (MSFT) and Nokia (MSFT) relationship, including one about how Nokia would use Windows as its primary smartphone operating system. So a bunch of media outlets ran with the above tweet, even though it was much more cryptic than some of Murtazin’s earlier missives.

The news caused serious fluctuations yesterday in shares of both companies, despite the official denials. Maybe that’s because companies almost always deny M&A activity, whether legitimate or not.

So I rang up someone who would know about such a deal, were it to exist. He insisted that both Microsoft and Nokia were being transparently forthright in saying that no such discussions had taken place.

“Clearly Microsoft has tied its ship to Nokia, so there is a vested interest, but doing a buyout just wouldn’t  make sense,” our source says. “Why take on all the extra risk, not to mention employees? The hope is that Microsoft will be able to lift Nokia by innovation in its software, not by bringing the existing problems in-house.”

On the other hand, it’s a remarkable reminder of what 140 characters (actually, 121 characters in this case) can do. Even if it’s vague and from an unofficial source. That’s the kind of silver line that Microsoft might want to tie its ship to going forward…