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2/11/2008
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Microsoft To Acquire Mobile Software Maker Danger

Danger's operating system powers some of the most consumer-friendly phones for accessing the Internet.

Microsoft on Monday said it has agreed to acquire Danger, a maker of mobile software and services, as well as the youth-oriented Sidekick smartphone sold by wireless carrier T-Mobile. Financial terms were not disclosed.

In buying Danger, Microsoft would get an operating system that powers some of the most consumer-friendly phones for accessing the Internet. Danger OS-driven data services include Web browsing, e-mail, instant messaging, games, multimedia applications, and easy access to online social networks, such as MySpace. Sharp and Motorola are manufacturing partners for Danger-powered devices.

Microsoft plans to add Danger's operations to its entertainment and devices division headed by Robbie Bach. Products under the division include the Xbox, the Zune, Windows Live, and the Windows Mobile platform for handsets.

"The addition of Danger serves as a perfect complement to our existing software and services, and also strengthens our dedication to improving mobile experiences centered around individuals and what they like," Bach said in a statement.

Microsoft claims Windows Mobile is available in more than 160 phones made by more than 50 hardware manufacturers, which sell the devices to more than 160 mobile operators worldwide. Nevertheless, Microsoft-powered phones lag in the emerging smartphone market, which grew by 60% last year over 2006, according to market researcher Canalys. The devices were one of the fastest growing segments in the technology industry.

The combined market share of all the vendors making smartphones powered by Windows Mobile accounted for 21% of the U.S. market in the fourth quarter of 2007, less than Apple's 28% share from the iPhone, which launched in late June. The leader was BlackBerry maker Research In Motion, which had a 41% share. Apple was second in the U.S. market.

Danger, based in Palo Alto, Calif., was co-founded in 1999 by Andy Rubin, who is now in charge of Google's mobile platforms. The company in December filed for an initial public offering with the Securities and Exchange Commission. A date and price range for the offering was not released, but the company planned to raise as much as $100 million on the Nasdaq, The New York Times reported.

As of Sept. 30, Danger had 923,000 subscribers to its data services. The company's investors include Redpoint Ventures, Mobius Technology Ventures, Motorola, and T-Mobile.

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