Microsoft Reportedly Paid $500 Million For Danger; Is A Handheld Xbox Player Coming?
By Tricia Duryee - Tue 12 Feb 2008 03:00 PM PST
When Microsoft (NSDQ: MSFT) announced that it was buying Danger, the maker of the pop-culture cellphone icon, the sparse press release failed to mention anything about how much it might be paying. GigaOm is reporting today that it totaled $500 million.
What we knew about the Palo Alto-based company was that it was seeking $100 million in an initial public offering to support its unprofitable operations. Most of the company’s revenues were coming from T-Mobile USA, where the Sidekick device had developed a fanatic celebrity following and even became fodder for rap lyrics. More recently, T-Mobile and Danger had started to expand the line to include low-end cheaper devices that didn’t have a camera and high-end smaller devices that were more attractive to adults. One of the nice things about the device is its fun user interface that includes flashing lights and plenty of beeping reminders. But also, more practically, the device works well because of its server services, which make it faster even though most of them run on the Edge or GPRS networks.
GigaOm also speculates on why Microsoft may be attracted to the company other than for its consumer attributes. He said: “The deal’s big sticker price is intriguing — leading me to believe that Microsoft wants to pull an Xbox on its mobile phone business.”
Some of our sources got back to us today with the same message. With Nokia’s (NYSE: NOK) N-Gage making a comeback and Sony (NYSE: SNE) PSPs developing a following, Microsoft was looking for a handheld gaming competitor for its Xbox brand. Also, as GigaOm mentioned, Danger’s server approach would let Microsoft compete effectively with Google’s (NSDQ: GOOG) Android system. Microsoft didn’t rule the possibility out, explaining in the release: “Combining these services with Microsoft’s connected entertainment and experiences technologies, including MSN, Xbox, Zune, Windows Live and Windows Mobile, will provide Microsoft with the tools to accelerate its work to create industry-leading entertainment and communication experiences for consumers.”
Posted in: Companies, Microsoft, Nokia, Operators, T-Mobile
