Palm puts Be in its bonnet

Palm Inc. finalized a deal to acquire the software company Be Inc. for US$11 million, the handheld computer maker announced Thursday.

As had been expected, the deal is an all-stock transaction and subject to standard stockholder and regulatory approvals, Palm said in a statement. The deal is expected to be completed in the fourth quarter, Be said in its own statement.

Along with acquiring Be’s intellectual property and technology assets, Palm has also offered jobs to Be’s engineering team, Palm said. Be designs software operating systems and applications for Internet appliances.

In addition to the acquisition of Be, Palm also announced the departure of Alan Kessler, general manager for its platform group, as of Aug. 17. Eric Benhamou, currently the chairman of the Palm board of directors and a member of the board’s committee on the platform group, will head up the division until a permanent CEO is named, Palm said. Palm announced last month that it plans to spin off the platform group into a wholly owned subsidiary of Palm by the end of the year.

Palm has been re-organizing the company to refocus itself on handheld computer hardware, its traditional core business, as well as the licensing of the Palm software platform.

Also last month, Palm announced that Motorola Inc., Intel Corp. and Texas Instruments Inc. (TI) were working on readying Palm’s handheld computer operating system, Palm OS, for use with more powerful chips, including some based on the ARM microprocessor core. The move was part of an effort by Palm to allow hardware manufacturers to design more innovative devices to run the Palm OS, as well as encouraging companies to create more advanced applications for the devices.

Be’s core product is its Internet appliance, BeIA, which has minimum hardware requirements including Pentium-class or PowerPC class processors, 8MB of storage, and at least 32MB RAM of memory, Be said on its Web site.

According to figures cited by Palm, the company has shipped over 16 million of its Palm Powered handheld products and the Palm OS is currently being used in 76 percent of all PDAs (personal digital assistant).

Palm, in Santa Clara, Calif., is at Be, in Menlo Park, Calif., can be contacted at