Microsoft Taps VC As A .Net Evangelist

In an effort to circulate its .Net products and services in the startup community, Microsoft has joined with Madrona Venture Group to get some of Madrona's portfolio companies using the products and developing XML-based Web services.

Madrona will choose an undetermined number of rising stars that are interested in the .Net initiative. In exchange, Microsoft will provide the companies with discounts on bundled hardware and software, co-marketing opportunities, strategic consulting, and other service perks.

Microsoft wants to build momentum for a number of products and technologies, including XML developer tools for building Web services that can spur better integration between Web sites. One such product is Microsoft's Passport, which enables online shoppers to log in to any Passport-protected site and then shop on other Passport sites without having to re-enter logins and passwords. Steve Bauman, Microsoft general manager, says that working with venture firms like Madrona is providing Microsoft with access to startups that might otherwise have fallen through the cracks in its sales channels.

Chuck Hirsch, managing director at Madrona, says being able to broker alliances with Microsoft will enable Madrona to accelerate development of the companies it selects. Hirsch, who previously cofounded Dare To Dream Intertainment, which was bought by Microsoft, says Madrona will choose portfolio companies that fit within Microsoft's .Net strategy. He says the companies will play a dual role--as both customers of .Net products and developers of .Net-enabled Web services.

Cahner's In-Stat Group analyst Kneko Burney says the strategy is a smart one. "What better way to access new-economy companies than at their infancy?" says Burney. "I don't know if it's going to be hugely lucrative for them, but I think it will be effective in power-branding .Net."