Report: Microsoft, Nokia started talking acquisition but stopped

Nokia(s nok) hired a Microsoft(s msft) executive as its CEO, and it penned a deal with Microsoft to use the Windows Phone OS exclusively in future smartphones. It was only a matter of time before the word “acquisition” started coming up in the companies’ talks.

According to the Wall Street Journal, Microsoft and Nokia were uttering that word quite a bit lately regarding Nokia’s handset business – as recently as this month — though ultimately their talks fell through. Microsoft walked away from the table, the Journal reported, in part because of Nokia’s faltering marketshare in smartphones, though you could argue Microsoft is just as much to blame for Nokia’s fall.

Though Windows Phone has made some recent gains, especially in Europe, its total share is still tiny compared to that Android(s goog) and iOS(s aapl). As Microsoft’s smartphone fortunes go, so do Nokia’s. If Microsoft has a dismal view of Nokia’s future prospects then what does that it say about how it views its own phone OS?