GigaOM

[...] Update: After gathering a little more information on Danger, despite its history of losses, a lot of that was due to the way the T-Mobile contract is set up and how it has to recognize revenue from that. The company was on its way to becoming cash-flow positive. If Microsoft can get carriers other than T-Mobile to carry Sidekicks, it could become a very valuable franchise. The size of the deal (educated guess here) was likely in the $500 million range. Update 2/12/08: GigaOm comes up with the same figure. [...]

[...] figure, while not officially announced, was dug up in reporting by GigaOm’s Om Malik. We haven’t confirmed that exact figure, but we do have enough info that suggests investors [...]

[...] Malik puts the Om in GigaOM so when he says, “The deal’s big sticker price is intriguing — leading me to believe that [...]

[...] figure, while not officially announced, was dug up in reporting by GigaOm’s Om Malik. We haven’t confirmed that exact figure, but we do have enough info that suggests investors made [...]

[...] approach would relegate it to the business market — a pretty safe assumption, if you ask us.  Read | Permalink | Email [...]

[...] Read | Permalink | Email this | Comments [...]

[...] - Sarah Perez - ReadWriteWeb Google Maps Street View Adds New Cities - Google Blogoscoped Microsoft Pays $500 million for Danger (Mobile) - Om Malik - GigaOm MTV Bringing Ads to Online Video Games - Tom Lowry - BusinessWeek Yahoo Layoffs [...]

[...] GigaOm is reporting that Microsoft (MSFT) paid $500 million in its deal to buy Danger Inc., which makes the software [...]

[...] want to buy Danger for $500 millions How Much Did Microsoft Pay For Danger? - GigaOM __________________ Research before you shot [...]

[...] Read | Permalink | Email this | Linking Blogs | Comments [...]

[...] [gigaom] [...]

[...] But it added another battlefront with the acquisition of Danger for an estimated $500 million. As Om Malik points out: The reason for this deal is more than just acquiring “consumer expertise,” as the company kept [...]

[...] based on Google’s Android platform (which is based on Linux). On top of that, Microsoft’s acquisition of Danger is being interpreted by some as a sign that the company might do a phone or platform competitive [...]

[...] According to Gigaom, Microsoft purchased Danger for a reported $500 [...]

[...] Read | Permalink | Email this | Comments [...]

[...] 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 [...]

[...] figure, while not officially announced, was dug up in reporting by GigaOm’s Om Malik. We haven’t confirmed that exact figure, but we do have enough info that suggests investors made [...]

[...] Read | Permalink | Email this | Comments [...]

[...] to Yahoo! for $44.6 billion, Microsoft also announced yesterday that they acquired Danger Inc.  GigaOM reported that the acquisition price was $500 million.  Coincidentally, Danger Inc. was co-founded by Andy [...]

[...] the maker of the popular Sidekick from T-Mobile, was purchased for an undisclosed amount of money. Some people estimate as much as $500 million dollars, given that Danger has raised over $140 million in [...]

[...] younger crowd and celebrities, due to its unique design that put a strong emphasis on easy typing. Om Malik is reporting that Microsoft spent $500 million on Danger, five times what the company was planning to raise in [...]

[...] Read | Permalink | Email this | Linking Blogs | Comments [...]

[...] Read the rest of this post Print Sphere Comment Tagged: Danger, Andy Rubin, Android, Om Malik, Sidekick, Microsoft | permalink [...]

[...] Malik puts the Om in GigaOM so when he says, “The deal’s big sticker price is intriguing — leading me to believe that [...]

[...] celej transakcie nebola oficiálne zverejnená, niektorí analysti odhadujú, že MS zaplatil približne 500 miliónov dolárov (ca. 11,5 miliardy [...]

[...] ¹ Pare per una cifra attorno ai 500 milioni di dollari. ² Sulla scia di quanto visto con [...]

[...] GigaOm found out the price and has an interesting analysis. [...]

[...] [Via: GigaOm] [...]

[...] official details have not been announced on the Danger acquisition, Om Malik is speculating that Microsoft paid $500 million. Further speculation is that early investors got [...]

[...] del desiderio è la Danger e sembra proprio che la trattativa sia già conclusa per la cifra di 500 milioni di dollari. [...]

[...] purchase originally happened just a couple days ago, and now IntoMobile has gotten word via GigaOm that the software giant might have paid a cool half a billion dollars for Danger. The general [...]

[...] ��� online ����� ��� ��� ������� ��� ������������ ������. �� ���� �������� ��� ����� ������ ���� � GigaOM ����� ��� ��������� ��� ������� 500 ����������� ��������, ���� ��� ��� ����� �� ��������� ��� � [...]

[...] has held that course recently, acquiring Danger (manufacturers of the Sidekick mobile device) for a reported $500 million. A $45 billion acquisition of Yahoo would certainly put a dent in that [...]

[...] has held that course recently, acquiring Danger (manufacturers of the Sidekick mobile device) for a reported $500 million. A $45 billion acquisition of Yahoo would certainly put a dent in that [...]

[...] Monday, Microsoft purchased Danger, the developer of T-Mobile’s Sidekick line. Om Malik estimated that Microsoft paid US$500 million for a mobile handset line that has a decent market [...]

[...] How Much Did Microsoft Pay For Danger?, GigaOM [...]

[...] lukaglobal wrote an interesting post today onHere’s a quick excerpt[…] How Much Did Microsoft Pay For Danger?, GigaOM […] [...]

[...] about EU and Justice Department creating problems when it comes to the pending Yahoo-bid and the Danger-deal. Specifically, Microsoft is implementing four new interoperability principles and corresponding [...]

[...] How Much Did Microsoft Pay For Danger?, GigaOM [...]

[...] 以前IPO申請した際に取り上げたDanger社ですが、その後マイクロソフトが同社を買収、それを受けて申請は取り下げられました。ちなみに、買収額は明らかにされていませんが、$500M（5億ドル）とする見方もあります。 [...]

[...] Microsoft has closed its acquisition of mobile software/platform maker Danger, for which it reportedly spent $500 million. [...]

[...] is the maker of the Sidekick cell phone. Press Release | TechCrunch | GigaOm | [...]

[...] the maker of the popular Sidekick from T-Mobile, was purchased for an undisclosed amount of money. Some people estimate as much as $500 million dollars, given that Danger has raised over $140 million in [...]

[...] source pas toujours fiable, mais si c’est vrai il reste du cash pour encore séduire Yahoo!. [GigaOM et TheInquirer en [...]

Om,

$500 million dollars is a “dangerous” price! (Sorry, I couldn’t hold back.) :-)

Seriously, I disagree with your suggestion of MS opening up the Danger platform due to the fact that Danger could cannibalize WinMo sales. Now normally, I’d say that those are market forces, but in this case MS has a HUGE advantage with WinMo, seamless integration with the desktop. If MS can improve the user experience to the point where one’s true desktop is on their handset, that’s a near impossible advantage for the other mobile OS’s to overcome. I think this would be a better strategy for Balmer & Co.

This line doesn’t make sense:

“While some of the early investors got modest returns, I am told that the later-stage investors made out like bandits.”

I’m guessing you mean the inverse of what you are saying here.

Great detective work. I love the Danger Platform, but think that this is more about Microsoft gaining control over Danger’s IP for leverage over Google, than about integrating or extending what danger has done.

Do you have any idea how many Danger shares are outstanding?

I hate to be the one to say it, since I’ve suffered professionally at the hands of walled gardens more than once, but I think it’s just naive to continue to beat the “open handset” drum.

All of the precedents in the wireless world point to the fact that mediocrity (via the walled garden) trumps glorious openness for one reason: assured profitability. While Apple makes a little bit of money on the iPhone even when it’s unlocked, they make a whole lot more on the 75% of iPhones that stay locked up in the walled garden — this whole concept was borrowed from the playbook of RIM, a company that has been vastly profitable playing within the walled garden.

The only thing that can shake the status quo is a fundamentally new, altruistic player operating on new as-yet unallocated spectrum. But until that actually comes to fruition, don’t expect change from the big players or anyone who does business with them.

(not bitter..) -Ian.

Om: opening just the code of WinMobile is not enough. You also need to open ActiveSync, Outlook and Exchange to actually open the platform. This will amount to a revolution at MS.

Om,
I searched for pricing info yesterday and came up empty. Instead I tried to back into conservative estimate from public record docs The result I published was a range that topped out in the $330m range….I was trying to hit the lower side of the range, but if your source proves correct, I was much to conservative. Nice work in tracking it down.

to Rog: the shares fully converted to common would have been 168.133million. There were 5 classes of preferred.
Because Danger was planning a possible public offering, a lot of their corporate documents were filed with the SEC (as noted in one of the comments). Those docs are publicly available. Financials, exec comp, partnerships, cap table etc. It’s all there. You can go to the SEC or check the article on my site for a link to the specific filing if you are looking for it. Om may have posted the link in his coverage too.

Thanks Om for the Edgar link. After reading the footnotes and capitalization sections, it seems that there were about 216 million shares (common and preferred, and esop) outstanding at the time of the IPO filing. It is a bit confusing, so I would be interested to see if you came up with a similar number… Rog

Thanks for the feedback Seth! I guess I misunderstood the S1. Rog

Om,

One thing you failed to consider in your analysis is what the Danger OS is really composed of. It’s Java up and down the stack. You can look more into this, but I highly doubt MS will add another mobile platform to their offerings, let alone a Java-based one. They may have purchased Danger to utilize the cachet of Sidekick with a very different audience than their typical WinMo consumer with the intent of repackaging WinMo in a way that appeals to the Sidekick demographic. People have made Windows Mobile look appealing (See NeoNode)

I’ve read other suggestions that the perhaps it was the pursuit of IP conflated with Google’s Android pursuit that enticed MS to pony up $500M. MS has a big war chest for going to court if there are indeed IPR issues between Android’s architecture and Danger’s, which some claim to be similar (and both are authored by Andy Rubin).

Regardless, I can’t see MS utilizing Danger’s phone platform in the long term… as such I feel pretty bad for the people at Danger heavily invested/attached to the technology. It seems to me that it will likely be phased out.

Of course this is deja-vu for Rubin and Britt (ex-WebTV employees). Back to Microsoft again (for Britt anyway). I think the WebTV founder Perlman has a piece of Danger although, as the article mentions, early doesn’t mean a good payola in this case. WebTV had a superb exit strategy, 2yrs work for the payout vs 10yrs here. Still welcome news for the stakeholders I am sure.

Now Dangers platform was/is a microkernel with Java running on it. I am sure they are hopeful that there won’t be any meddling but then who knows. Could be a Win platform in their future. (a complete wrench into their current plans I am sure).

The Danger has always been a better device than its marketing would allow. Young people really like it. But I wonder whether MSFT is the right buyer for a device young people have adopted. Youth is REALLY wasted on the old. More than on the young.

BTW, glad to see you writing again, but take it easy.

Too much money for that company. Microsoft seems to enjoy spending money on bad investments. (link)

too much.

Just another property for MS to run into the ground.

When are they going to fire Ballmer?

Thanks for the info — that’s useful to know.

Rather than open up the platform entirely, the easiest thing for Microsoft to do would be to port the .Net Compact Framework to the Danger platform, expose some hooks into the underlying services, and encourage developers to write .Net apps for the platform.

That way, they’re spreading their preferred development methodology, and at the same time, making it possible for developers to support both Danger and WinMobile without having to do a wholesale rewrite.

Danger always intended for the OS to be open as a development platform. However, T-Mobile doesn’t like open platforms, so end of story from that angle. It wouldn’t take more than a flick of a switch from Danger and all kinds of cool apps would be released for the Sidekick family.

There is certainly decent IP that MSFT is buying, which helps when Qualcomm, NTP, RIM and others are in the space. Android’s IP is likely inconsequential with respect to these other players.

It’s funny, but people in the Valley still haven’t learned that Open in mobile doesn’t mean a darned thing until carriers are forced to accept it. The ONLY way that open will really happen is when new networks with 1/10th the cost per bit come on line and threaten the existing model. It’s possible that WiMax might be exactly that network, but remember that the two biggest WiMax players in the US are Sprint and Clearwire. McCaw owns Clearwire, and he’s no dummy and will clearly sell out in a minute to the highest bidder, which will invariably be AT&T, Sprint or Verizon.

I too think this move by MS is all about slowing down the momentum in the Android platform by threatening IP lawsuits.

Danger as a device maker is pretty worthless.

Ballmer is very aggressive.

What did MS pay for? Danger WAS a platform way ahead of it’s time, but it never advanced… If they were getting Andy Rubin’s innovation, it would be a better story. There’s no way they will be able to compete with Android. The only thing I can think is that they overpaid so they could aquire some specific patent…

Meg Whitman should’ve bought Danger. That way, combined with Skype, she could let buyers and sellers not just contact each other through VoIP, but through mobile VoIP in the future!

Om thanks for the detail here - very interesting. With 225MM capital invested already the 500MM price tag seems pretty reasonable, especially if that VC money came in several years ago which would mean the annualized return on that VC money would be fairly modest.

Why Danger? Why not Palm? That way they can get larger market share atleast. Palm makes PalmOS and Windows mobile - which makes more sense and Sidekick(?)

Om,good work. Thats why they pay you the big bucks:)

Hope your feeling well….

I have been a loyal Sidekick customer every since they first came out. I have had Sidekick 1, Sidekick 2 and now Sidekick 3. I am excited to see what Microsoft will do with the Danger products! It can only get better!

I have a completely different viewpoint on the Danger acquisition and would love to here people’s comments on this one. Yes the LiMo and Android thwarting is one thing, but why not think of the Sidekick as the potential of being Xbox Portable? No one could have predicted that in such a short amount of time, the Xbox platform would do so well. I think the Danger devices target a much younger generation that those who tend to purchase a WM handset.

The other side of things is that Danger is not just a handset, it also requires a server backend. This is a similar strategy that Motorola took when acquiring most recently Good and a while back, 4th Pass.

Microsoft also wants to use this acquisition, in my estimation, to also go after telco installs with their stack of products and at the same time, learning from the Danger server software that could potentially help. This area has been dominated by Sun and HP, surely Microsoft wants to play in this arena.

I think its a great acquisition. Danger receives monthly service fees from T-Mobile and revenue has grown from $49.3 million in the 12 months ended September 30, 2006, to $56.4 million for the same period in 2007, when data service subscribers reached 923,000.

Danger always intended for the OS to be open as a development platform. However, T-Mobile doesn’t like open platforms, so end of story from that angle. It wouldn’t take more than a flick of a switch from Danger and all kinds of cool apps would be released for the Sidekick family.

There is certainly decent IP that MSFT is buying, which helps when Qualcomm, NTP, RIM and others are in the space. Android’s IP is likely inconsequential with respect to these other players.

It’s funny, but people in the Valley still haven’t learned that Open in mobile doesn’t mean a darned thing until carriers are forced to accept it. The ONLY way that open will really happen is when new networks with 1/10th the cost per bit come on line and threaten the existing model. It’s possible that WiMax might be exactly that network, but remember that the two biggest WiMax players in the US are Sprint and Clearwire. McCaw owns Clearwire, and he’s no dummy and will clearly sell out in a minute to the highest bidder, which will invariably be AT&T, Sprint or Verizon.

about EU and Justice Department creating problems when it comes to the pending Yahoo-bid and the Danger-deal. Specifically, Microsoft is implementing four new interoperability principles and corresponding

What did MS pay for? Danger WAS a platform way ahead of it’s time, but it never advanced… If they were getting Andy Rubin’s innovation, it would be a better story. There’s no way they will be able to compete with Android. The only thing I can think is that they overpaid so they could aquire some specific patent…