Will Microsoft Go BlackBerry Picking?

It's been a rumor-filled week leading into Labor Day, and Thursday was no exception, with reports surfacing that Microsoft (Nasdaq: MSFT) might be considering purchasing BlackBerry maker Research In Motion (Nasdaq: RIMM) (RIM).

It's not the first time such a rumor has circulated, but it still had the effect of driving RIM's stock prices up on Wall Street. RIM shares increased US$2.61, or almost 3 percent, to a 52-week high of $90.32 in Friday morning trading.

Representatives for both Microsoft and RIM declined to comment, citing company policy prohibiting them from commenting on rumors or speculation.

Year of Acquisitions

Microsoft has had an acquisitive year so far, including just this week bringing chat-tool provider Parlano into its fold. In May, the Redmond, Wash.-based software giant also purchased digital advertising firm aQuantive for $6 billion.

Research In Motion, based in Waterloo, Ontario, has gained a devoted following among business users for its BlackBerry e-mail and phone device. The latest version of the BlackBerry, released last month, incorporates WiFi connectivity.

Microsoft makes Windows Mobile software for smartphones and pocket PCs.

Doubting Thomases

While speculation was rampant at the end of the week, the merit of the rumors was widely debated.

"I don't know why Microsoft would do this, since they're not traditionally a hardware company and are definitely not a cell phone company," Michael Disabato, vice president and service director with Burton Group, told the E-Commerce Times. "They would be jumping into something here that I'm not sure makes sense for them."

Dueling Rumors

Symbian currently leads the mobile operating system market with roughly 60 percent globally, while RIM and Microsoft are competing for second place, Disabato noted.

"One thing BlackBerry does better is e-mail and now voice -- it's an appliance," he said. "People don't buy it for styling, or for an MP3 player like the iPhone. If Microsoft were to try to tinker around with that, it would risk alienating lots of BlackBerry users who have come to love that operating system."

There have also been rumors that RIM may be snatched up by Google (Nasdaq: GOOG), Disabato said, so it's possible a move by Microsoft -- if the reports are true -- could be a preemptive strike. It's also possible Microsoft could be considering such a move as a way to counter Google's reported plans to create a "Gphone," he added.

Reasonable Fit

"You can never say never, but it doesn't strike me as being particularly logical," Bill Hughes, principal analyst with In-Stat, told the E-Commerce Times.

There are some aspects that could make some sense, Hughes acknowledged, such as the fact that Microsoft and RIM both excel in selling to enterprises. "The place where Microsoft is very strong is in selling to corporations and IT departments, while the place where the BlackBerry is strong is selling to corporate senior executives and then into IT departments," he explained. "So from a channels perspective, it makes sense."

In other areas, however, the fit may not be as good.

Poor Fit

"The BlackBerry operating system and Windows Mobile have very little to do with each other," Hughes said.

"From a technological standpoint, RIM would have to fundamentally redo a lot of the work, and the BlackBerry message server is also very different from Microsoft's approach to sending out e-mails," he explained. "So from Microsoft's perspective, it doesn't seem like RIM is going to fill any gaps that they don't already have addressed."

Of course, there could be other reasons motivating such an acquisition, Hughes noted.

"There's nothing that Microsoft has that would really add to RIM's value," he concluded. "Then again, the logic behind acquisitions is not always apparent to the outside world."