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Elop, who ran Microsoft’s business software division, will return to the U.S. firm as head of its mobile devices business.  As part of Microsoft, Elop will head an expanded Devices unit. Julie Larson-Green, who in July was promoted to head a new Devices and Studios business in Ballmer’s reorganization, will report to Elop when the deal is closed.  The irony here is that Microsoft’s design for it Surface line waa awesome.  The failure was one of marketing.  Elop went to Nokia to pull the Finns out of a marketing disaster.,  He failed. Elop is now being discussed as a possible replacement for  Balmer.

The idea off Elop as Bill Gates’ successor frightens me.   Elop was brought to Nokia because the Finnish company had made terrible mistakes.  First they tried to go it alone in operating systems ..remember Symbian?  Nokia was  drubbed not only by Apple but by Samsung.  Nokia might now be Samsung’s big rival if, like the Korean firm, the Finns had chosen to join in the move to Android as an alternative to Apple’s iOS.  The error in Elop’s decision to go with Windows, is confirmed by the similar error Blackberry made with sticking to its own proprietary OS.   Imagine a Nokia phone … with Nokia’s customizations and reputation .. competing with Samsung.  T

he market seems to understand this.  Shares in Nokia surged 39 percent to 4.10 euros on Tuesday as investors who had borrowed and sold the stock to bet on further price falls rushed to buy back to limit their losses. They are still only a fraction of their 2000 peak of 65 euros and Microsoft shares in Frankfurt were down about 2.2 percent.

The Finns are pissed …. SOLD FOR “PEANUTS”   is the phrase. “As a Finnish person, I cannot like this deal. It ends one chapter in this Nokia story,” said Juha Varis, Danske Capital’s senior portfolio manager, whose fund owns Nokia shares. “On the other hand, it was maybe the last opportunity to sell it.” “So this is the outcome: the whole business for 5 billion euros. That’s peanuts compared to its history,” he said.

Taken that way, Balmer seems to have rescued his Biddy Elop.  How can that be good for Microsoft.?  The smartphone business has segmented into two domains. Apple owns the fanboy crowd.  With Apple’s  huge ecosystem in place, a lot of people buy iPhones tin order to buy stuff from the app store and iTunes.  Hell, as an academic I own an iPAD because there is as yet no rival to iTUNES University for lectures. Add in the retail superpower of Amazon, and an Android has access to a huge world that rivals Apple.  But … anyone can build an Android phone.  So, how is Microsoft Phone going to compete?

Balmer has already failed several times to understand the importance of an ecosystem.  He tried to build the Zune as a rival to the iPOD.  Good idea/  Well Jeff Bezos had the same idea, built a marker for MP3s at Amazon without the Appleish idea of an exclusive device to lay the music. Even when the Surface, a wondrous device, came out, the only way to play music was via an app that was based on Microsoft’s X box.  I was unable to ever figure that our and bought a NEXUS 7 to listen to  music.,  Bezos (and Apple) won.  The app store for Surface, meanwhile, is PITIFUL.  Again, if you want to live in Microsoft land you can (almost a year after the device was release), use Outlook.  OUtlook is great BUT … I use gMAIL and the gMAIL app on the Surface sucks.

Balmer’s judgements in uses of Microsoft capital to buy things gas also been less than impressive.   The man seems to favor failing companies that continue to fail.  Microsoft reportedly paid $500 million for the edgy smartphone designer, Danger,  in 2008. This might have made sense, given how well Apple has used design as a marketing tool.  Most Danger staff responded by quitting,  Two years later Microsoft launched the disastrous Kin phone using Danger Design. The Kin  was pulled off the market in less than two months after poor sales.  Last year Microsoft agreed to invest $605 million in Barnes & Noble Inc’s challenge to Amazon’s Kindle.  The chalenge failed,  B&N has  quit making the Nook . Microsoft agreed to lend $2 billion to Michaeol Dell’s equity firm Silver Lake to help  take PC maker Dell Inc private.  The deal has been held up by shareholder opposition, even as Dell’s fortunes decline.  Then he paid  $1.1 billion last year for online social network business Yammer, but has said very little about it since and does not break out its financials.  Microsoft paid $6.3 billion in cash for the online ad company aQuantive – in 2007 and wrote off virtually all of that in 2012, effectively admitting the investment had been worthless.

The most relevant decision was Balmer’s purchase of Skype for $8.5 billion, a price that was considered high at the time by analysts. Microsoft says consumer demand is rising and Skype revenue increased last quarter, but stopped giving user numbers this year and does not divulge the actual financials of the service.  Worse,, so far Skype isx at best pasted onto the Microsoft ecosystem .. it works poorly no9n a Surface and seems utterly foreign to MS Office.

Not all Microsoft decisions have failed.  One investment, not a purchase, has had an extreme success.  Balmer’s  $240 million purchase of a 1.6 percent stake in Facebook in 2007  is now worth much more and paved the way for co-operation between Facebook Inc and Microsoft’s Outlook email and Bing search engine.  The buy of Great Plains/Navision laid the foundation of Microsoft’s corporate software business and is considered a success.

Bungie – Paid only tens of millions of dollars for game studio Bungie, creator of the mega-hit shooter game Halo, in 2000. Bungie eventually split from the company, but Microsoft kept the lucrative Halo franchise.

Worse yet, after investing untold dollars in Windows 8, the OS still does very little to take advantage of its unique features that could create an ecosystem built on the huge world of Windows applications.  Go into a Windows store and ask to see a Surface running Corel Draw or Adobe Acrobat Pro.  These things run great in my Surface Pro but accessing them from the Win * interface requires a kludge.

Meanwhile, for $35 I just bought a Chromecast that will let my Nexus 7 take over my TV!

Balmer as usual shows unbelievable lack of insight into humanity.  At a news conference in the Finnish capital, Balmer  said  “It’s a bold step into the future — a win-win for employees, shareholders and consumers of both companies,”  “Bringing these great teams together will accelerate Microsoft’s share and profits in phones and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services.”