Microsoft's Bailed Cyanogen Deal Means 'There's A New Sheriff In Town'

Microsoft Corporation MSFT was expected to invest in Cyanogen, a startup that has created an open source mobile OS using Android. The latest report says that Microsoft is moving in another direction.

"The idea that they're walking away from a deal means there's a new sheriff in town compared to [former Microsoft CEO] Steve Ballmer," Albert Fried & Company Director of Research Rich Tullo told Benzinga. "It's probably a good thing."

Tech industry expert and analyst Jeff Kagan said that it "sort of falls into the same trap that we all expected when we heard the news to begin with."

"Nobody understood it," Kagan told Benzinga. "You're gonna see companies move into different directions and partnerships. Some will work. Most won't. Companies today are [trying new things]. Whatever sticks, they'll build on -- whatever falls away they'll walk away from."

False Rumor?

Global Equities Research analyst Trip Chowdhry isn't sure that Microsoft actually considered an investment in Cyanogen. He said the company has been investing in a lot of firms because of its financial position, but that doesn't mean the Windows maker wanted a piece of this one.

"I wouldn't say an open source Android version would be something Microsoft would be interested in," Chowdhry told Benzinga. "Microsoft's focus is to promote their own ecosystem. I don't think there's any legs to these rumors that they would invest in an Android OS. I don't think that rumor is correct."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.