One of Microsoft’s ‘tough choices’ could be a write-down of Nokia

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Published onJuly 4, 2015

published onJuly 4, 2015

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It’s rumored thatMicrosoft may lay off some of its employees at its Nokia acquisitionas well as to write-down on its estimated value.

Just this Monday, Microsoft struck a deal with AOL that involved internet advertising. Under the agreement, AOL will handle management, sale display, and video advertising on MSN, Skype, Xbox, and other Microsoft products around the world. In addition, AOL’s search and advertisement will be powered by Microsoft’s Bing. In return, the two companies will share profits from the advertising of each other’s products.

It’s reported that Microsoft will move about 1,200 of their employees over to AOL. John DiFucci, analyst at Jefferies, says Microsoft’s decision to exit the display ad business shows “management’s continued discipline around allocation of resources and costs,” on a research report. He also says that there’s a good chance Microsoft could write-down about $5.2 billion in with its Nokia acquisition. He explains,

“An aggressive write-down and restructuring would mitigate future losses, but we note that the business would still likely burn cash. We see the Phone Hardware business as poorly positioned versus the established Apple and Android ecosystems and believe Microsoft will have to either make significant investments to drive scale or accept lower market share and market relevance.”

It would still pretty surprising to see such large of a write-down on the value of Nokia. After all, a huge majority of Windows phones are manufactured by Nokia.

Radu Tyrsina

Radu Tyrsina has been a Windows fan ever since he got his first PC, a Pentium III (a monster at that time).

For most of the kids of his age, the Internet was an amazing way to play and communicate with others, but he was deeply impressed by the flow of information and how easily you can find anything on the web.

Prior to founding Windows Report, this particular curiosity about digital content enabled him to grow a number of sites that helped hundreds of millions reach faster the answer they’re looking for.

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