Channel Marker

Feb 12 2008   8:11PM GMT

Microsoft focus in question as report says Danger cost $500 million



Posted by: Bcournoyer
Tags:
Google
Microsoft
Mobile networking technology
News
Open-source
Software as a service (SaaS)

dangerBreaking news this afternoon has cast Microsoft’s acquisition of Danger in a whole new light. Microsoft spent $500 million on the pickup, according to GigaOM — a figure sure to raise more questions among Microsoft channel partners about the company’s long-term focus.

GigaOM’s Om Malik thinks there’s only one reason Microsoft would pay such a high price: Google. Microsoft could use Danger’s Software as a Service (SaaS) platform to deliver its Search, Windows Live Mail and Messenger services to mobile devices, creating new competition for Google Android. 

Of course, Google is also the reason Microsoft is pursuing a Yahoo takeover. And even though the reported Danger price is just 1% of Microsoft’s $44.6 billion Yahoo bid, it’s still one of the biggest deals in Microsoft history, according to Todd Bishop’s Microsoft Blog. Microsoft partners were already worrying about the company’s seeming preoccupation with Google — at the expense of the products and services they’re supposed to be selling — and this news sure won’t help ease those fears.

Microsoft announced the Danger acquisition yesterday. Both Om and Venture Beat’s Matt Marshall believe Microsoft should make the Danger platform open to attract developers. But others like tech exec Ian Bell say an open Danger platform would cut profitability, which is always a concern when you’re talking about a $500 million investment.

Microsoft critics are also jumping all over the acquisition, much as they are with the Yahoo takeover attempt. One GigaOM reader identified as “Brian” commented, “Microsoft seems to enjoy spending money on bad investments.” And another, “Bill,” wrote, “Just another property for MS to run into the ground. When are they going to fire Ballmer?”

With the Yahoo situation quickly becoming a fiasco, the Danger acquisition, ongoing Windows Vista problems and several major new product launches, Microsoft will have a lot on its proverbial plate this year. It will remain to be seen whether the company keeps its focus on the issues that matter most to its partners.

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