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Four reasons why Microsoft isn't buying RIM

It's obviously close to the end of the summer, and the news is slow.  How else to explain the rumour that Microsoft is planning to acquire RIM?  Wishful thinking, or too much BC Bud? Here are 4 reasons why it makes no sense.

  1. Sales: Microsoft already has a strong mobile franchise in Windows mobile.  A year ago it had almost reached the North American run rate of BlackBerry.  Since then the Pearl and Curve have shipped, which have bolstered RIM's results, but nonetheless, the two companies are very competitive.  Besides, Microsoft doesn't typically buy companies to acquire customers.
  2. Technology: Technically, they have very similar capabilities.  RIM does push email better.  Microsoft does media better.  But both have near identical platforms on the handheld and server.  RIM runs a large network operations center as well, which is one of the reasons their email is so good.  Microsoft has the ability to build a NOC if they want one. 
  3. Price: With a market cap of $50 billion today, RIM would be expensive for Microsoft.  Sweeten the deal by offering RIM shareholders a 25% premium on their stock, and you have an acquisition price of $62.5 billion.  That's 24% of Microsoft's market cap.  Too rich, even for them.
  4. Partnerships: RIM already has a strong relationship with Nokia… Microsoft's arch-rival in the mobile space. 

'nuff said. I'll donate $100 to the EFF if I'm wrong.

{ 2 comments… add one }

  • MatthewS September 2, 2007, 6:00 pm

    You should donate $100 to the EFF regardless. 😉

  • Sutha Kamal September 4, 2007, 12:25 pm

    You forgot the incredibly strong ego's on both sides of the table as well… neither side likes one another much, or respects one another much. Doesn't sound like the best place to begin acquisition discussions…

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