Microsoft Is Smart to Embrace Danger

All-encompassing tech giant Microsoft(MSFT) is purchasing Danger Inc.

According to published reports, Microsoft is paying $500 million to acquire the 10-year-old mobile software company -- a pittance in the current world of mega-deals.

The deal is proof that Microsoft is not putting all of its eggs in one Yahoo!(YHOO)-acquisition basket.

It also could turn out to be a very good move for the Redmond, Wash., behemoth.

Microsoft's Windows Mobile operating system is aimed at powering smartphones for business and enterprise users.

Danger's mobile operating system -- which incorporates Sun Microsystems'(SUNW) Java software -- is best known for creating the platform that powers T-Mobile's Sidekick and other message-centric smartphones that are super-popular with young, obviously nonbusiness-oriented users.

Actually, Danger describes itself as "a software and services company that's revolutionizing the experience of the mobile Internet, bringing voice and messaging communications, open Web browsing, and personalized services to a growing number of loyal users around the world, including leading figures in politics, business, and popular culture."

That's true -- as long as they're young users, exactly what Microsoft needs to expand its Windows Mobile brand to a previously untapped segment of the current smartphone-buying marketplace.

"The addition of Danger serves as a perfect complement to our existing software and services, and also strengthens our dedication to improving mobile experiences centered around individuals and what they like," says Robbie Bach, president of the entertainment and devices division at Microsoft.

Translation: We needed to buy this to expand our brand to a younger audience.

The interesting twist is that Danger was thinking of going a different route. Back on Dec. 19, it announced it had filed a Securities and Exchange Commission registration statement for an initial public offering.

It now appears it has received -- and accepted -- a better offer.

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