Nokia To Net $1 bn In Microsoft Deal

While speculation into the Nokia-Microsoft merger has suggested that a large payoff would be headed from Redmond to Espoo, little is known about the deal's exact price tag.

Until now. According to Bloomberg Buinessweek, Steve Ballmer and company are shelling out $1 bn in their deal with Nokia. Sources note that though it isn't yet finalized, the deal will tie both companies up for five years.

Though investors have yet to be convinced by the arrangement's potential for success, the collaboration between Nokia and Microsoft was seen as a sensible move in light of both companies' respective difficulties in the mobile market. Nokia has watched its margins shrink and its influence erode as smartphones dominate the market.

Similarly, Microsoft has faced issues breaking into the mobile sphere with its Windows 7 Phone operating system, which has lagged in comparison to operating systems from Google and Apple.

With the exchange of cash, sources say that Microsoft is also gaining access to Nokia's trove of patents. While the subjects of these patents range from self-charging to flexible phone, it is likely that Microsoft simply needs access to them more so to optimize its operating system for use on Nokia's technology.

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