Under the current leadership of Satya Nadella, Microsoft is further firming its position in the business that they can do well. On the other hand, Skype acquisition was a successful move by Microsoft because it helped Microsoft to replace its aging Microsoft Live Messenger and fend off competition from Google and Cisco in the enterprise markets, and to give Microsoft a key player in the growing mobile Voice over IP market.
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Microsoft expected to create a synergy through its software capability and Nokia's hardware capability but it failed due to multiple reasons including insignificant user base and poor app developer community. Nokia's smartphone division acquisition by Microsoft was a major failure because they tried entering a business that was outside their traditional business of producing enterprise products, with a buggy mobile OS and poor app store. And those that created value were the ones that further strengthened Microsoft's position in the market that they understand well and did well. Some created exceptional value for the company and its stakeholders while some fell apart. Since then there have been many acquisitions by this Redmond-based company. Ten years later in 1997,, one of the largest acquisitions of that time. Microsoft's first major and one of the most successful acquisitions was Powerpoint in 1987, almost 30 years ago.
Strategic investments and acquisitions are often justified with the argument that the two companies will create 'synergy' and it will benefit the shareholders through combined value and performance.
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