The talks were initiated by the new Nokia management. Almost three months ago, Nokia hired Stephen Elop as its president and CEO. Before that, Elop worked for Microsoft from January 2008 to September 2010 as the head of the software giant's Business Division.
If these talks bear fruit, it could be a big deal for both companies. Microsoft would have a huge partner pushing Windows Phone: although it is losing market share, Nokia is still the biggest maker of smartphones in the world. Windows Phone could in turn help Nokia rebuild its image in the mobile market. While the hardware side of Nokia phones has been very solid, the software side has been floundering. With Symbian possibly on the way out, Nokia was expected to bet everything on its new Meego operating system. Now it looks like Nokia doesn't want to put all its eggs in one basket, which seems like a good idea to us.