Microsoft Corporation (MSFT): Ringing The Registers, Yet Again

For Microsoft, the move is just the latest in what has become a recurring pattern of making deals to finally expand away from personal computers in a meaningful way.

You’ll recall that Microsoft purchased Skype in 2011 for $8.5 billion in cash, in a move designed to solidify Microsoft’s real-time video and voice communications services.

The following year, Microsoft purchased Yammer for $1.2 billion in cash, with the hopes of expanding Microsoft’s footprint in social media.

Unfortunately, ambitious as they were, the nearly $10 billion spent on these acquisitions have resulted in little tangible benefits thus far.

Add the Nokia deal to the mix, and all told, Microsoft has now spent more than $18 billion of shareholder money in just a few years.

The best use of shareholder capital?
In the end, I consider this deal a huge plus for Nokia. If nothing else, Nokia at least got itself some time to come up with devices that can more effectively compete with the industry leaders.

Whether this is enough to right the ship remains to be seen, but for now, Nokia will survive.

From Microsoft’s perspective, these types of deals have skeptics. Microsoft’s critics have long contended that the company is too tethered to the PC, and striking a deal with a company struggling as much as Nokia is probably isn’t the long-term solution.

This is the likely reason why Microsoft shares fell 6% after the deal was announced.

Microsoft is immensely profitable, thanks to its ironclad grip on software. However, this deal will probably not realize Microsoft’s stated goal of meaningful mobile penetration.

The article Putting Microsoft’s Spending Spree Under the Spotlight originally appeared on Fool.com is written by Bob Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

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