All Things Digital

Just because Microsoft acquired Danger doesn’t mean the company has its eye on Research in Motion (RIMM), though some observers apparently feel otherwise. Noting the ugly decline in RIM’s share price in recent months and a financial crisis that’s already slowing the corporate IT spending that is its lifeblood, Canaccord Adams analyst Peter Misek speculates that the Blackberry peddler is a good takeover target for Microsoft (MSFT). “RIM is a massive strategic fit [for Microsoft],” Misek told Reuters. “I’m fairly certain they have a standing offer to buy them at $50 (a share).”

Really? Leaving aside for a moment the fact that Microsoft already has a mobile OS in Windows Mobile and the fact that RIM’s client architecture is, you know, based on Linux, wouldn’t a merger between two of the largest players in the smartphone market invite antitrust scrutiny?

Microsoft isn’t always unrequited in love. This morning the software giant said it had agreed to acquire Danger Inc., maker of T-Mobile’s SideKick smart phone, for an undisclosed sum.

Why?

“It completes the picture for us in terms of making the transition from just being on the business side of things to being on the consumer side of things,” said Robbie Bach, Microsoft’s president of entertainment and devices.

Seems Microsoft really is serious about the consumer cellphone business after all. But what’s it going to do with Danger? Said Jupiter analyst Michael Gartenberg, “The SideKick had strong appeal as the anti-BlackBerry for younger audiences and it will be really interesting to see how MSFT integrates the technology, business model and overall device cachet to a culture more at home selling to enterprise CIOs than it is selling to rock stars.”

Could this be the beginning of a Zune-based cellphone ?

In August 2005 Google acquired a two-year-old start-up called Android. Founded by Andy Rubin, the guy behind mobile-device maker Danger, Android was rumored to have been developing a mobile-phone operating system.

Google never said much about the acquisition or its plans for Rubin, but he’s been on the company’s payroll ever since, presumably holed up somewhere on its campus in Mountain View, Calif., working on something–perhaps with the “graphics-software fanatics” from Skia, another mysterious mobile start-up Google acquired in 2005. Together they’d make quite a team–Rubin with his passion for location-aware mobile devices and Skia’s engineers with theirs for the robust, but portable, graphics engines that could be used in them. Theoretically, of course.

Why the history lesson? Well, industry sources tell The Wall Street Journal that Google might publicly detail its long-rumored mobile-phone project as early as Monday. “U.S. carriers likely to be part of the announcement are T-Mobile and Sprint, according to our sources, but there could be others by the time Google says its piece,” the Journal reports. “While Sprint appears to be agreeing to work with Google to put the Web giant’s new Linux-based open operating system into phones, T-Mobile will probably go even further: the company has worked with Google for months on plans to build Google-powered phones with a variety of Google software and applications. As far as handset partners for Google, Taiwan’s HTC is a likely bet, our sources say. Samsung, LG and Sony Ericsson are also possible, but we’ll wait and see the full roster. Equally interesting will be who isn’t on the list.”

Indeed. Because whoever’s not on that list could be losing out on a chance to become a true player in the mobile-search advertising business, which research outfit the Kelsey Group recently claimed will grow to $1.4 billion in 2012 from $33.2 million this year–in the United States alone.

Given Google’s well-documented efforts to set up a free Wi-Fi network in San Francisco, we believe the upcoming spectrum auctions could represent a rare opportunity for the company to acquire something resembling an exclusive (licensed) nationwide WiMax footprint, and largely eliminate any access dependency on third parties. As such, we believe Google’s potential involvement bears watching, especially in light of the fact the company has shown little hesitation in delving into the other aspects of networking. Google’s selection of equipment vendors, such as Force10 and Infinera, indicate to us a willingness to embrace leading-edge technologies, and we believe WiMax fits that description.”

–Joe Chiasson, Susquehanna Financial Group, February 2006

This morning Google announced an alliance with Sprint Nextel that will see the two companies working together to bring Google’s search, digital mapping technologies and GTalk chat service to Sprint’s WiMax network, which, once it’s completed, will theoretically allow wireless Web access at speeds and prices similar to cable connections.

The deal follows the announcement of Sprint’s plans to collaborate with Clearwire to build out a nationwide WiMax network by the end of 2008. It also follows Google’s conditional pledge to drop at least $4.6 billion on the Federal Communications Commission’s auction of the 700-megahertz spectrum, which has long been said to be the future of WiMax (with fewer line-of-sight issues and wider coverage and better building penetration).

Coincidence? Or part of a master plan in which Google wins the 700-megahertz spectrum, uses it to help complete the Sprint/Clearwire nationwide WiMax network effort and then announces the long-rumored Google Phone–upending the telco-cable duopoly in the process?