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Nokia and Yahoo Partnerships Put Microsoft's Future in Doubt

Once there was Wintel. In the days when "Seinfeld" was new every week, the Dallas Cowboys were Super Bowl contenders and people actually listened to Everclear on the radio (we can't explain everything), Microsoft and Intel ruled the world. Rarely has such a forceful and dominant partnership existed. Windows and Intel chips literally ran most of the planet's PCs. And PCs were just about all anybody had back then for computing.

These days, though, the nature of computing has changed, and so has the Wintel partnership, which is now trying to be more about mobile devices and less about crusty old PCs. It's not really even Wintel anymore, at least not in the sense it was 15 years ago, but it's still one of the best partnerships Microsoft has going.

And that's kind of sad. There's still plenty of power behind Wintel, even if it's a shadow of what it was in the '90s. (And, as we've said here before, the PC is very much alive; witness the hype surrounding Windows 8. Yet again, the punditsphere is wondering whether this will be the last great Microsoft OS. The same people asked the same questions five years ago with Vista and then a couple of years ago with Windows 7. Vista certainly wasn't great, but it didn't kill the Windows franchise. And Windows 7 wasn't the death knell, either. Neither will Windows 8 be. We figure the pundits will freak out again come Windows 9, or whatever it'll be called. And Windows will still be alive. But we digress, as we have a habit here of doing.)

Somewhere along the way, Microsoft lost its ability to forge dominant partnerships. We think we know why. Microsoft used to have clout. It used to be the doubles partner everybody wanted for the big tournament, the receiver every quarterback wanted to throw to (or vice versa), the teammate every batsman wanted to see standing at the other end of the pitch. (That's a cricket reference for those of you in the U.K., India and other such crickety places. You're welcome. And please don't complain if we messed that up -- it took quite a while just to come up with a cricket metaphor at all.)

But years of stagnant stock price performance, wobbly post-Bill Gates leadership, inconsistent innovation, seriously threatening competition and chronic uncoolness have left Microsoft stumbling around like a pro athlete in his twilight looking for one last gig. Microsoft is Willie Mays with the Mets, Johnny Unitas with the Chargers, Joe Namath with the Rams. (Hey, it's football season.) OK, to be fair, Microsoft isn't in its twilight the way those guys were. But a couple of its big partnerships these days smack of desperation rather than prowess.

Let's take Yahoo, which Microsoft tried to buy and then ultimately just sort of took over -- not officially, of course -- with the imposition of the Bing search engine. Yahoo is about as current as those "Seinfeld" episodes or Troy Aikman's Cowboys. Sure, those things evoke some pleasant memories (and aren't bad in reruns), but Yahoo is a big, clunky cell phone in a smartphone world.

And this is Microsoft's big Web "partnership"? Yahoo just axed its CEO. It's likely to sell at some point in the near future -- maybe even to Microsoft! -- and not for as much as it would have commanded even a few years ago. Nothing about having Yahoo as a partner says progress or innovation or caché. It says that Microsoft is hopelessly behind Google in consumer search and is hanging on to a once-familiar name in hopes of retaining a shred of credibility, which it doesn't really have.

And speaking of once-familiar names, what's Microsoft's other big alliance at the moment, the one in the burgeoning market where Apple and Google are killing the folks in Redmond? Oh, yes, it's that mobile tie-up with Nokia, another company that might not be long for this world and that left its best days behind it at least a decade ago.

The Nokia partnership is almost worse, given that it has a real blind-leading-the-blind feel to it and given that Nokia is now run by a former Microsoft executive. Nokia seems sort of like Guam now, more of a Microsoft protectorate than an independent partner. At least Guam brings in tourists, though; does Nokia actually do anything for Microsoft? Or is Microsoft trying to forge ahead with Windows Phone 7 despite having to drag Nokia's stone of shame behind it (which we don't anticipate turning into the stone of triumph any time soon)?

Microsoft-Nokia feels almost more like a charity case than a true partnership, but unfortunately for Microsoft the company isn't in a position to be helping anybody else out in the mobile space. That's Microsoft's lot in life these days, though -- the pretty girl that was once on everybody's dance card has had some bad plastic surgery and hasn't aged well, and Google and Apple (along with some other smaller, craftier vendors) are stealing all the most promising young lads at the cotillion. (Hey, at least it wasn't another football metaphor.)

It hurts Microsoft not to have more powerful and capable strategic partners in markets it wants to come from behind to dominate. It hurts because Microsoft can't rule everything anymore just by tying it to Windows and Office. It would be great for the Microsoft partner ecosystem and for the company itself if Microsoft could go into the brave new worlds of search and mobile with capable guides, but that's not the way things are playing out. That makes these new markets dark and confusing places indeed for the company that was once on top of the world.

What do you make of Microsoft's relationships with Nokia and Yahoo? Sound off at the comments section below or at lpender@rcpmag.com.

Posted by Lee Pender on September 15, 2011 at 9:03 AM