Lucent/Motorola
This rumor has been so widely circulated, it was being repeated by the guy at the local deli. Only one problem: There doesn't seem to be a lot of meat on dem bones.

There's no doubt that Motorola is getting acquisition happy on the telecom equipment front, and it definitely wants more core infrastructure exposure (see Moto's in a Buying Mood). But would it really see Lucent as the way to do this?

Yes, the two have talked (but who hasn't?). At least one reliable source has confirmed this. However, as have many other potential Lucent suitors (should we call them "Lutors?"), Motorola has concluded that Lucent's large and mysterious pension obligation is radioactive – and Motorola CEO Ed Zander is said to cower under the table whenever a lawyer mumbles "pension liability." (See Lucent Numbers Raise Pension Question.)

Others say this deal is just idle chatter, generated by investment bankers desperate for a big deal. "It just sounds like an idea from the investment banking community to me," says Frank Dzubeck, president of Communications Network Architects. "I think buying Lucent would set Motorola back, and Motorola stock would tank."

Good point.

Lucent/Alcatel
Meanwhile, back in Murray Hill and Paris, the Odd Couple have reportedly re-established contact, though there's no word yet on whether a therapist is involved. Keep in mind that Lucent and Alcatel almost merged once before. (See Lucent/Alcatel Rumors Fly, Alcatel/Lucent Work Continues, Alcatel, Lucent Throw in the Towel, and We'll Always Have Jersey.)

Again, the problem here is that Lucent's pension may smell like a block of stale North American paté to the French. And then there's the matter of Bell Labs. It's assumed that the U.S. Federal government would require Lucent to divest Bell Labs before selling itself to a foreign company, but nobody has proposed a clear path to how this would happen – or who would want Bell Labs, the world's most expensive science fair.

One thing is certain about both these Lucent rumors (shall we call them "Lumors"?): Chairman and CEO Patricia Russo is definitely looking for an exit strategy, say sources close to the company.

"Pat does not want the status quo," says one former Lucent executive who declines to be named. "She wants a way out... They are not going to stay independent."

So who'll take Lucent? That's the $12 billion question (Lucent's market capitalization as of today).

Nortel/Whomever
Spring thaw is coming to the Great White North, and like some awkward juvenile Grizzly bear coming out of hibernation, Nortel has been trying to get back into the mating dance – let's just hope it doesn't maul somebody.

Several sources say Nortel continues to sniff around the startup space, especially in the access markets. Its OEM partner, broadband access vendor Calix Networks comes to mind first. But Nortel's currency is as shaky as a wooden nickel. Its stock price has recently been drifting below $3. It would likely have to pay cash – and probably quite a bit of it – which would further drain its precious balance sheet. And if you're Calix and revenues are building, why not just hold out for the IPO?

A possible Nortel/Alcatel combination has also been making the rounds. ("Nalcatel" has an interesting ring to it, doesn't it?) This rumor is the most vague and unbelievable of them all. It's a combination so strange and awkward that Leonard Nimoy is rumored to be looking into it. The deal killer might be product overlap – or perhaps a terrible mismatching of French and Canadian accents. On the upside: Nortel's pension issues are not as spooky as Lucent's.

Huawei/Whomever
Just today, the China Daily, quoted a Huawei exec as saying the company has been talking to Lucent and Nortel (see Report: Huawei Talking to Lucent, Nortel). I'm sure these companies must have talked at some point, but the form any such deal would take is unknown. Would Lucent and Nortel really want to resell Huawei gear to their solid, North American RBOC accounts? A merger seems unlikely. At any rate, it's clear that managing relationships with Huawei will be one of the trickiest propositions for all of the equipment providers in 2005.