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Comment by hollerith | Hacker News Reader

Let me see if I have this right: the CEO of Nokia very publicly declares that he is going to bet the company on WP7 weeks before finalizing a deal for WP7.

Didn't the very public declaration, which IIRC caused resignations by engineers working on Symbian and Meego, radically weaken Nokia's negotiating position?

I must be missing something because it is unlikely that the leadership of a major corporation would be that unskillful at negotiation.

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I've been involved in an $1B+ acquisition that stretched out over 12 months. The initial deal, that was announced publicly, had language of the form "All assest required to run the subsidiary will be transferred to the acquiring company." The next 3-6 months required us to determine exactly what was actually purchased. And finally, the last 6 months was us transferring those assets.

The CEO doesn't get involved in the line item details - just announces the high level strategic decisions.

There is a likely some perceived value, to both Microsoft and Nokia, in communicating this strategy to the market/developers/partners - I'm not sure _what_ that value is, mind you, but that would be one reason why the high level deal was announced before all the nitty gritty details were inked.

It has been suggested that Elop was installed at Nokia specifically to act in Microsoft's best interest. Indeed, his actions make sense when so viewed.

Interestingly, this may be his specialty: check out his movements preceding the sale of Macromedia to Adobe.

Can you unpack 'was installed'? Microsoft doesn't have the ability to appoint Nokia's CEO.

Of course they wouldn't have the ability to appoint at will, but they certainly could install opportunistically. You start by spotting someone who manages their career in a way that indicates useful skills and mindset:

http://www.siliconbeat.com/2008/01/11/microsoft-beware-steph...

...then you make them a high-valued member of your senior leadership team...

http://www.crunchbase.com/person/stephen-elop

...then when opportunity strikes and Nokia tries to buy him away you set up an under-the-table quid-pro-quo deal that would, one presumes, dwarf the $6m signing bonus Nokia gave him:

http://siliconangle.com/blog/2011/03/11/stephen-elop-of-noki...

Sure, it's just conjecture, but it's not implausible.

You haven't answered my question at all. I'm asking how MSFT can "install" someone at Nokia. All you've said is that Elop was a good employee who got promoted, and then Nokia came and tried to hire him. That's not MSFT "installing" anyone.

The far simpler explanation is that if Elop is going to make a big bet with Nokia, he feels safer doing it with MSFT (who need Nokia, and where he knows people) than Google (who don't, and where he doesn't).

I'm sorry. The only question that I see is to unpack "install", which I take as a figurative expression meaning to analyze something into its component elements. I broke down everything that I meant to imply by the word, so you'll have to ask a different question.

Edit to reply below: your probability analysis ignores Elop's improbable behavior as described by hollerith above. And, again, this is not my explanation (this conjecture was all over threads discussing the deal the day it was announced). I'm not even saying that I buy into it, although I do have to acknowledge that people involved with deals in the billions of dollars are seldom strangers to opportunism.

You didn't break it down, though. Your explanation still contains the word 'install', imbued with the same probability distribution of implications as before.

I think a more likely explanation is that the causality is in the other direction: the Nokia board was already leaning toward making a deal with Microsoft before they hired Elop, and he was hired with that in mind.

In your opinion, if there were no “under-the-table quid-pro-quo deal” giving Elop an incentive to make a deal with Microsoft, what would he (or another CEO) have done instead?

The Nokia board fired the previous CEO because, well, his pet strategy was failing. So some kind of radical shakeup was needed. The two most obvious alternatives were “get in bed with Microsoft” and “get in bed with Google”. While Google doesn’t need Nokia’s help promoting Android, Microsoft desperately needs some major player to support Windows Mobile. Therefore Nokia is in a better negotiating position w.r.t. Microsoft than w.r.t. Google.

Given the large number of people across both corporate bureaucracies that would be involved in negotiating the final deal (and in providing information that the negotiators would need), if they had tried to keep everything under wraps until the final agreement had been signed, there would have been no end of leaks. By pre-announcing the deal the CEO could at least put his own spin on what was going on.

Thanks.

MS (and possibly Nokia) probably wanted an early public commitment. People were pronouncing WP7 dead on arrival. The Nokia announcement puts real weight behind the platform.

In short by kicking up a fuss then they have killed the DOA claims. It means more people will have been looking at the platform. If they had delayed until now more mind share would already be locked into Android or iPhone. Unless a major player made a lot of noise about WP7 nobody would bother learning to develop for it.

They probably already signed an intention for the final agreement, and just had to fill in the details.

Yes, final sign-off on these deals can be a slow and tortuous process. But it still seems impetuous and somewhat risky to make announcements based on a final sign-of that has not yet happened, no matter how secure your feel in the likely hood of that final sign-off happening. Unless, of course a separate agreement was made that if the deal did fall through at that late stage the halting party would compensate the other in some meaningful way.

I think that kind of multi-stage deal is common in large corporate transactions.

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