Redmond, Wash.-based Microsoft Corp.’s plan to acquire mobile technology developer Danger Inc. will grant the software mogul the brand recognition it seeks in the youth market, analysts said. Microsoft is aggressively trying to grow in markets it deems to be high growth, as was also seen with the Yahoo! Inc. offer to enter the online services space, said Kevin Restivo, senior research analyst for software with Toronto-based IDC Canada. “It says that Microsoft is more willing than ever to buy companies in areas where it wants to have a bigger presence,” he said. The acquisition of Danger should help Microsoft broaden its consumer appeal in light of the popularity of offerings like social networking services, Web browsing, and real-time mobile messaging, said Scott Rockfeld, group product manager for mobile communications with Microsoft. “Danger appeals to the young adult and teen market,” he said. The company intends to incorporate Danger’s assets with those of Windows Mobile, he said. Alongside gaining a “great brand” in the youth space, Restivo said the Palo Alto, Calif.-based company brings good software designers and user interface capabilities – of which the latter will be beneficial to Microsoft in light of challenges it has had with mobile device user interfaces. “If they layer [those assets] on to Windows Mobile, they’ll have a much more powerful device that already has a following in the market,” said Restivo. He added that those were the primary drivers behind the acquisition, considering the companies’ very different approaches to mobile computing. In turn, he said Microsoft can improve the problems with Danger’s Sidekick device. He said that if Microsoft continues the Sidekick product, it will eventually be powered by Windows Mobile. The two companies would face a challenge integrating their mismatched operating systems if they chose to take that route, said Jon Arnold, principal with Toronto-based J. Arnold & Associates. given that Dangers’ is proprietary and doesn’t support third-party developer applications, “it wouldn’t fit very easily with Microsoft’s system, so there’s a challenge there, but I’m sure they’re going to figure it out.” Arnold said he guesses Microsoft will integrate the good pieces – in particular the user interface – of Danger’s operating system into its own. Microsoft intends to combine the best assets across both platforms, said Rockfeld, while also acknowledging that “some of the details are to be worked out.” In fact, Microsoft may have the superior operating system, but not “a killer product that people would buy,” said Arnold. “Danger could potentially become the platform for that.” The move may have, in part, been to remove a potential competitor from the mobile market, said Arnold. “The DNA of Danger goes back to the guy who built Android for Google.” | 
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