Microsoft Buys Another Desperate Company: Danger Goes To Redmond

from the danger,-danger,-bill-gates dept

Mon, Feb 11th 2008 10:34am — Mike Masnick

It would appear that Microsoft's M&A team isn't solely focused on Yahoo these days. Back in December, we noted that Danger, makers of the Sidekick mobile phone device, was planning to IPO, despite not having a track record worth an IPO. As we noted at the time, it seemed like the company was going to IPO because that was its only option. The truth is probably that the company was desperately looking for a buyout, and now Microsoft has come through. It will be worth watching to see what Microsoft does with Danger, as Danger does not use Microsoft's operating system, and its model is not based on licensing software, but in taking a toll from service fees. It would take quite a bit of effort to pull out Danger's OS, which was very carefully designed for the device itself, and replace it with Windows Mobile (and it also might lead Sidekick fans to flee to other devices). All in all, it's an odd sort of acquisition for Microsoft. One would hope that the company actually has more specific plans on what to do with Danger, because the obvious fit isn't apparent. From Danger's perspective, though, an acquisition by anyone at this point has to be viewed as a better option than trying to IPO, which almost definitely would have been a disaster.

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Filed Under: desperation, mergers
Companies: danger, microsoft

17 Comments

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4-80-sicks, 11 Feb 2008 @ 10:52am

Whee! It's like the 90s all over again! Except then, Microsoft was the "desperate" party, trying to buy anything that looked like potential competition. Danger doesn't look like it fits that model? Well, just like with the xBox (XBox? Xbox? XBOX? I forget) and Zune, there is now room for computer-like devices everywhere. Room for Microsoft everywhere, yay! And if somebody else is in my living room, in my pocket, MS sees that as a lost opportunity I guess?

I don't know what's confusing about this, they say right in the article this is a "perfect complement to [their] existing software and services"... Clear as day! haha

To be serious for a minute: Probably what it is is they want Danger's contracts, and they don't want another company's platform to get too popular. MS SOP. Who needs a plan, if you own the competition (however tenuous that connection may be), they cease to be a problem.
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GeneralEmergency (profile), 11 Feb 2008 @ 10:56am

Does Microsoft not have a VP of Obvious Joke Contr
I mean really.

Microsoft + Danger = Exploding Cellphone in your pants.

Helllooooo, Is this thing on? Tap Tap Tap.
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kamikyo, 11 Feb 2008 @ 11:27am

Microsoft needs a successful mobile gaming platfor
I see this as a possible foray by MS into the casual mobile gaming market. The Sidekick seems more similar to the PSP and DS than to the latest Next Big Thing in the mobile phone world, the iPhone. MS is sorely lacking a mobile 'xbox' gaming platform, and the Sidekick interface/patents & general internet-readiness have the added benefit of leveraging what has been the once clear success of the xbox platform - xbox live.

The question is: Is Danger cable of being the catalyst for this drive?
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Onikitsune (profile), 11 Feb 2008 @ 11:35am

This really does make sense.
This seems like a good choice for Microsoft. As noted earlier in the month, MS is trying to build up a hardware market, and this will help to solve that problem. Second, as noted in the article above, Danger has a service based revenue stream. It's clear that MS want to expand into that market as well. acquiring Danger will give Microsoft a focused insight on how that can work, then apply that to their advantage. Over all a good move on their part.
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Aaron Friel, 11 Feb 2008 @ 11:48am

Re: 4-80-sicks
Conspiracy theories without understanding the industries involved are humorous, at best.

They don't want Danger to be too popular? Hah! There are plenty of competitors in the mobile space that are vastly more popular than Danger. This is like McDonalds buying up a 3-store franchise in order to prevent Burger King from taking over the fast food world.
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Joel Coehoorn, 11 Feb 2008 @ 12:01pm

Keeping up with Google
It's simple: Microsoft has to keep up with Google and Apple. They made moves into the cell phone area with iPhone and Android. Now Microsoft needs to make it's phone play. The investment required to get windows mobile running on the sidekick will be significant, but it's a fraction of what it cost to purchase the company so perhaps MS feels it's justified.

What is surprising is that a lot of the value in this purchase is the Sidekick brand, but MS already has a mobile brand in the Zune if all it wants to do is match Apple. Don't be surprised to see a new phone released as the Zune Sidekick, or some mashup like that.
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Anonymous Coward, 11 Feb 2008 @ 12:22pm

Re: Keeping up with Google
Android/gPhone looks awesome. It's a phone that you can play quake on... What have we become?

Looks like Google is going to give away $10M bounty for the best applications also. Guess it's time to dust off the ABAP programming book...

http://www.youtube.com/watch?v=_avwGFsv60U
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4-80-sicks, 11 Feb 2008 @ 12:30pm

Re: Re: 4-80-sicks
Conspiracy theories without understanding the industries involved are humorous, at best.
I think you did not understand what I meant. It's about taking over the entire market at this point (maybe never again), it's about just having a hand in. Dominance is the preferred position, of course, but even giants have to start with baby steps when entering new spaces. No conspiracy theory here.
Why they chose Danger in particular, well OK, I can't say for sure, because--surprise, surprise--I don't work for Microsoft. Maybe you can come up with a better idea as to the reason? Or do you just like to shit-talk? I would only develop what I already wrote: the Sidekick is a very high-profile, popular model phone, which happens to not run Windows Mobile. How many other smart phones make that claim, besides the iPhone? Not very many, right? You see Microsoft appreciating that being out there? I don't. That's not a conspiracy, that's history repeating itself, not to mention the way business often works.
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4-80-sicks, 11 Feb 2008 @ 12:37pm

Re: Re: 4-80-sicks
"...it's *not* about taking over the entire market at this point." Oops.
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Wesha, 11 Feb 2008 @ 12:39pm

> It would take quite a bit of effort to pull out Danger's OS, and replace it with Windows Mobile
> (and it also might lead Sidekick fans to flee to other devices).

No way! Gods, please please please pull out that piece of crap and give me some kind of REAL OS that will at least let me install MY apps!!!
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BillGod, 11 Feb 2008 @ 12:49pm

HMMMM gives me an idea
Microsoft if your reading this.

I am planning on IPO'ing myself. You can buy me for 44 billion dollars at any time.

Thanks
BillGod
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Anonymous Coward, 11 Feb 2008 @ 1:32pm

Re: Does Microsoft not have a VP of Obvious Joke C
GeneralEmergency + No sunlight for 80 hours = pathetic
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GeneralEmergency (profile), 11 Feb 2008 @ 1:35pm

Re: Re: Does Microsoft not have a VP of Obvious Jo
"No sunlight for 80 hours"

Well...duuhhh. This IS Seattle. They don't turn the sun back on until May!
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joe smith, 11 Feb 2008 @ 2:39pm

big suprise, ms still trying to take over the world
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Anonymous Cretin, 11 Feb 2008 @ 2:43pm

Shoulda bought Palm instead ,er, first.
Palm products already run WinCE, or whatever it's called now. And Palm just might be desperate enough to fall for a buyout. Unless, of course, the Foleo really takes off. Yeah. Right.

Instead, MS will try to cram WinCE into the Hiptop and re-brand it as a Zunephone. Current Hiptop owners will switch to iPhone because they won't want to be mistaken for un-hip Zunephone-using rednecks.

Zunephone sales will hover near zero because consumers will not want to figure out how to use WinCE and styli and all that. Zunephone will join its DOA sibling, the Zune, and MS will need to buy another sickly techno-weakling company to make it seem like they're doing something, ANYTHING, in addition to milking Windows and Office (money makers) and shilling Xbox (money loser.) Hmmm. How about Yahoo?

Hey Ballmer: why has Microsoft stock dropped more than 40% since you took over from Bill? Better get Big Ass Table (aka Surface) out the door soon. Real cash cow for sure.
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cyunt, 3 Mar 2008 @ 11:35am

Re: Microsoft needs a successful mobile gaming pla
agreed.
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alex barnes, 30 Oct 2008 @ 7:37pm

go for it
Really, I think MS just just go for it. They have so much fu*ken money anywayz and the hiptop sidekicks are awesome. If only they had flash so people can watch youtube and everything. That's the only main problem with the sidekicks but if they had a MS OS on the hiptop I probley just get an iphone
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