paid too much..
MS paid too much for nokia. They don't have much to offer of value other than a handset maker with a fist full of patents. If MS wanted a technology & intellectual property holder to merge with they could have bought RIM... which is plenty more desperate (and they have government contracts in hand).
Microsoft needs to be taking some bold steps outside of Redmond (WA) and work at the grassroots level to get internet to the consumer. If that means becoming and ISP like Google (fiber), than so be it...
To do ANYTHING of significance (or make what they're currently working on successful) they need a PROPER leader.. it goes without saying they don't have that yet..