<story><title>Microsoft to Cut Jobs, Take $7.6B Nokia Writedown</title><url>http://www.bloomberg.com/news/articles/2015-07-08/microsoft-to-cut-7-800-jobs-as-it-restructures-phone-business</url></story><parent_chain><item><author>exelius</author><text>This is actually amazing. Between Nokia and aQuantive, Microsoft dumped over $14 billion into two failed acquisitions. I can&amp;#x27;t recall another company over the last decade that has had a total write-off of that scale (well, maybe the HP-Autonomy thing, but there was likely some fraud involved there).&lt;p&gt;I have absolutely no idea why they purchased Nokia in the first place -- it was obvious that they were never going to seriously challenge Apple or Google, and Nokia was another obviously sinking ship. It was like if Circuit City had purchased Radio Shack. I have no idea why the board let Ballmer blow billions on an acquisition they knew he wouldn&amp;#x27;t be around to see through and that didn&amp;#x27;t fit with the strategic direction of the company 6 months later.&lt;p&gt;If I were an institutional investor, I would demand a change in board leadership. This kind of stuff is just unacceptable for a public company. I know hindsight is 20&amp;#x2F;20, but blowing $14 billion on acquisitions that were doomed to begin with is simply inexcusable. You can blame Ballmer for being a terrible CEO, but the blame really rests on the board for allowing him to make really big, really bad decisions.</text></item><item><author>tdicola</author><text>&amp;quot;Microsoft will record an impairment charge of about $7.6 billion on its Nokia handset unit&amp;quot;&lt;p&gt;Wow, well there it is--looks like the rumor is true.  So the Nokia deal was basically a complete flop?</text></item></parent_chain><comment><author>throwawaykf05</author><text>1. Nokia was pretty much the only real manufacturer of Windows Phone. Did they really have a choice? Microsoft does not seem to be the type to give up on their bets easily, and it sometimes pays off. For instance, as I recall, that&amp;#x27;s where they started with Xbox and Bing, and both products are doing well now.&lt;p&gt;2. Even though their relative market share is low, keep in mind the market is huge and so in absolute numbers, they are selling quite a few Lumias. Millions of devices every quarter is a pretty decent number, and something that could be leveraged in various ways. Not a direct comparison, but note that until 2007 Apple ran their entire business on products that had minority market share.&lt;p&gt;3. Not very familiar with the aQuantive deal - how was it doomed to begin with?</text></comment>
<story><title>Microsoft to Cut Jobs, Take $7.6B Nokia Writedown</title><url>http://www.bloomberg.com/news/articles/2015-07-08/microsoft-to-cut-7-800-jobs-as-it-restructures-phone-business</url></story><parent_chain><item><author>exelius</author><text>This is actually amazing. Between Nokia and aQuantive, Microsoft dumped over $14 billion into two failed acquisitions. I can&amp;#x27;t recall another company over the last decade that has had a total write-off of that scale (well, maybe the HP-Autonomy thing, but there was likely some fraud involved there).&lt;p&gt;I have absolutely no idea why they purchased Nokia in the first place -- it was obvious that they were never going to seriously challenge Apple or Google, and Nokia was another obviously sinking ship. It was like if Circuit City had purchased Radio Shack. I have no idea why the board let Ballmer blow billions on an acquisition they knew he wouldn&amp;#x27;t be around to see through and that didn&amp;#x27;t fit with the strategic direction of the company 6 months later.&lt;p&gt;If I were an institutional investor, I would demand a change in board leadership. This kind of stuff is just unacceptable for a public company. I know hindsight is 20&amp;#x2F;20, but blowing $14 billion on acquisitions that were doomed to begin with is simply inexcusable. You can blame Ballmer for being a terrible CEO, but the blame really rests on the board for allowing him to make really big, really bad decisions.</text></item><item><author>tdicola</author><text>&amp;quot;Microsoft will record an impairment charge of about $7.6 billion on its Nokia handset unit&amp;quot;&lt;p&gt;Wow, well there it is--looks like the rumor is true.  So the Nokia deal was basically a complete flop?</text></item></parent_chain><comment><author>T-A</author><text>If Nokia had gone under (or switched to Android in a last-ditch attempt to shore itself up) there would have been 0 manufacturers of Windows Phone hardware left. That would have been the end of it. I guess Microsoft looked at how much they had already invested in Phone, compared that to the bill for Nokia, and decided they weren&amp;#x27;t ready to pull the plug yet.</text></comment>