Microsoft CEO Steve Ballmer knew he had to make the Windows Phone 7 deal with Nokia, at just about any cost. Billions of dollars in subsidies for Nokia? Share advertising revenue? No surprise there. But in today's hyper-connected age, with high-definition video conferences negating the need to travel, Ballmer really showed his dedication to Nokia by ditching a private jet for a commercial plane, and flying through snow and fog to meet with Nokia officials in person.
The Wall Street Journal has the detail, part of the story "Nokia's flirtations put the fear of Google into Microsoft."
"Mr. Ballmer and his lieutenants headed for Helsinki in January to show how serious Microsoft was about cutting a deal. The plan was for Mr. Ballmer to fly privately into Helsinki, where he would then travel to a private Nokia facility, [Nokia CEO Mr. Stephen] Elop added.
"Mr. Elop said he instead got a call from Mr. Ballmer informing him that because of snow and fog, the plane wouldn't be able to land in Helsinki. About to run out of fuel, Mr. Ballmer instead landed in Stockholm. At that point, the fastest way for Mr. Ballmer to reach Helsinki was to fly commercially, Mr. Elop said, despite the greater risk that he could have been recognized.
"While Mr. Ballmer was waiting quietly in the lounge, his cover was nearly blown when he was paged by name over the loudspeaker because of an error related to his plane ticket."
With $8.4 billion in Microsoft stock among his financial holdings, Ballmer probably doesn't fly commercial airlines too often. But Ballmer had to get to Helsinki fast to save the talks with Nokia, which at one point nearly broke down.
That's because, according to the Journal, "Nokia executives believed Microsoft was treating Nokia as it would any potential handset partner, while Nokia was making a 'bet-the-company' decision on a software partner."
Nokia was desperate, and wanted its partner to show some desperation too, in other words. Nokia held discussions with Google, but apparently didn't get as much money from the maker of Android as it was promised by Microsoft.
Microsoft also caved in to Nokia's demand that it cut a deal before an important meeting with investors, and that Nokia could use a mapping service it acquired in its $8.1 billion Navteq acquisition.
Google wasn't willing to offer that concession, since it has a highly successful mapping service of its own running on Android phones. But Microsoft was willing, and will even let Nokia share "advertising revenue generated by Microsoft location-based services enabled by Navteq - for example, when someone searches for pizza on a Windows Phone and gets an ad for a nearby restaurant," the Journal reported.
Clearly, Nokia and Microsoft needed each other far more than Nokia and Google did. Nokia could have joined a crowded market for delivering Android devices, with little hope of differentiating itself. Instead, Nokia can be the primary company delivering Windows Phone 7 devices. But Microsoft has gotten almost no market share out of WP7 since it hit stores a few months ago, and perhaps needs a hardware vendor that will put all of its resources behind the software, rather than one that hedges its bets between Android and WP7.
While the Nokia/Microsoft deal makes sense from the desperation factor, it may not be enough to overtake the giant lead held by BlackBerry, iPhone and Android. We don't even know yet when the first Nokia/WP7 phone will hit the market. It'll have to make a big splash for Microsoft's billions and Ballmer's desperate flight to Helsinki to pay off.