industrynews

Last week we reported that it was likely that crazy-like-a-fox Carl Icahn was setting his sights on forcing Yahoo to accept a merger offer from Microsoft -- never mind that said offer had been taken off the table and definitely never mind that Microsoft had been making googly-eyes (pun intended) at AOL. So that happened: Icahn has his seats on the board and is pushing for a deal.

Pushing around Microsoft ain't like pushing around Motorola, though. For one thing, unlike Motorola, their executives use email. Witness this one from platforms and services president Kevin Johnson, who write essentially puts the kaibosh on the idea that they're in talks now -- but he doesn't rule them out in the future. It will have to wait until after Wednesday's “big announcement,” purported to relate to Live Search getting better (yet again). (Hey -- at least he admitted the branding sucks.)

The amount of noise Microsoft has been making lately regarding online services is reaching jet-engine-proportions, more on that in a future post.

Meanwhile, the latest Microsoft plan is apparently to just partner with Yahoo or just buy their search marketing division. This plan is starting to get Icahn angry. You don't want to see Icahn when he's angry.

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Although our friends at Android Central aren't complaining about Moto's new Android focus, over here on the Windows Mobile side of things it looks a little grimmer. The new Co-CEO, Sanjay Jha, is exerting his newfound authority by making some pretty sweeping changes. ...And by 'changes' we mean cutting 'thousands' of jobs, scrapping 'dozens of phone designs' and consolidating around just three operating systems: Android, Windows Mobile, and feature-phone P2K. It looks like Moto will use Android for all their consumer stuff, relegating Windows Mobile to business. What's more, Engadget notes that they'll probably outsource their WinMo development too.

In other words, don't expect much more hidden innovation like we saw on the Silver Q9h. We also don't know what this means for the Alexander or the Atilla or, heck, the Napoleon. We figure all three are far enough along that they'll see release.

As for this potential outsourced company, no word on that yet. Whoever it is, we hope that they're able to manage that Moto hasn't yet; Namely: putting screens with higher resolution that 320x240 into their phones. [WSJ]

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Originally noted over at the Microsoft Exchange Blog and then noted, well, all over, the Mobile Communications Product Group at Microsoft now has a new leader: Terry Myerson. Myerson comes over to the WinMo team after heading up Exchange (Andy Lees is still the SVP, in case that was unclear). Why's that important? In recent years Exchange has become pretty much the de-facto corporate email solution, they've pretty much taken the lead under Myerson's watch.

Windows IT Pro had a sit down with Myerson about the move and what he thinks about the future of Windows Mobile. Despite the iPhone's unprecented quarter (seriously, it was ginormous), Myerson doesn't think that Apple's going to drive them out of business anytime soon. He cited WinMo's 18 million licenses in the past year and 30 phones they introduced in 2008.

More on what exactly Myerson is facing after the break!

The main focus moving forward (besides helping Windows Mobile 7 get out the freaking door) looks to be a continued focus on Enterprise while making that same device usable outside of work:

“Microsoft’s strategy for Windows Mobile has always been to nail tough business requirements while not forgetting that all of us go home to our families and friends,” Myerson said. “And we want people to carry a single phone that crosses those two worlds seamlessly.”

Myerson also cited the Danger acquisition -- we're hoping we will see the fruits of that either in Windows Mobile or in WM services right quick. In all, it looks like a good move for the WinMo team bringing on an Executive with a proven track record of success with Exchange.

Here's the thing, though, although we agree with the argument that there's plenty of room in the smartphone market for even niche players and with the argument that competitors like the iPhone and Android raise general awareness of Smartphones and therefore can help Windows Mobile (the rising tide argument), we really don't want Windows Mobile to be stuck as a “niche player.”

Think about how quickly the smartphone market has changed in the past year: the iPhone has gobbled marketshare like a hungry, hungry hippo; Android has gone from a glimmer in our eyes to a shiping device; RIM has managed to pivot and introduce their own iPhone-competitor in the Storm. We fully expect the next year to be just as crazy -- there's no market like the smartphone market, as I said at TiPb earlier.

Given that the latest rumors are pegging the Windows Mobile 7 release for late 2009, that would likely mean we wouldn't see devices until 2010. If the next version of Windows Mobile is going to be a little more than a year away, it's going to need to feel like a device that's “five years ahead of the competition” if it's going to viable in this crazy-fast smartphone marketplace. That's in addition to the “big launch” Robbie Bach has said we can expect someday.

While we hate to raise expectations too high, that's pretty much where we feel the smartphone market is at: it's changed so much in the past year and is changing so quickly now that Microsoft needs to target the next version of Windows Mobile to beat the next versions of the competition, not what they have out now.

In other words, Myerson and the rest of the WinMo team have their work cut out for them.

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Sorry, Mr. Block, Motorola has decided to take their handset business in another direction. To wit: they've named Sanjay Jha their next CEO of their mobile devices business, he'll serve as Co-CEO with Greg Brown. Jha, we assume, reads email directly on the computer (unlike, according to rumors, his Co-CEO), as he's formerly of Qualcomm. There's a tiny twinge of irony here since Motorola recently ditched Qualcomm chipsets in favor of Texas Instruments. Then again, given Jha's Qualcomm roots, one could be forgiven for secretly hoping for Motorola devices powered by Snapdragon (Jha's understandably fond of the platform).

Jha headed up Qualcomm's CDMA technologies unit - which we take to generally be a good sign for Motorola if only because he will probably have experience navigating US law after all that 3G chip ban and patent fight craziness that went down last year.

Eventually, if all goes according to plan, Jha will be a CEO minus that “Co-” part, as Motorola still plans on spinning off their handset division into a separate company.

Good luck to you, Dr. Sanjay Jha. As I mentioned on my appearance on the T4 show last night, the Motorola Q9h is still my favorite smartphone of the past year or so; I still believe Moto has the chops to release another favorite. In the meantime, we wouldn't complain if you cleared up the mysterious disappearance of the Sprint Q9c.

Read: Cellular News

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Update: WME-a-culpa: the below story is about Verizon Telecom, not Verizon Wireless. Bob writes in to let us know that Verizon Wireless is actually almost completely non-union and thus not involved with Verizon's labor problems. In fact, the two companies don't actually have all that much to do with each other. So Verizon Wireless customers: move along, nothing to see here. Verizon Telecom customers, read on.

The question “Can you hear me know?” may have a different answer for Verizon customers in the coming days. A strike by 65,000 union workers for the communications provider is looming if a labor contract is not agreed upon by midnight Saturday.

According to various news sources including the Syracuse.com and the Boston Globe major unresolved issue between the unions and Verizon is the preservation of jobs and health care. According to reports, Verizon has been outsourcing jobs to other countries. Adding 1.5 million subscribers is all well and good, but it's not too helpful if there aren't employees around to support them.

The Communications Workers of America and the International Brotherhood of Electrical workers have members who are involved in installation and maintenance of the Verizon Network. Verizon, one the country's largest providers of communications services, earned $5.52 billion last year, down from $6.2 billion in 2006. A company spokesperson informed Syracuse.com that a contingency plan is in place should a strike occurs but would not go into detail what those plans are.

A similar strike occurred in 2000 resulting in a backlog of phone repairs and installations nationwide.

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Verizon Adds 1.5 Million Subscribers in Q2

Verizon has reported their Q2 results, you can get some of the details in their Press Release. The biggest news: they've added 1.5 million subscribers (compare that to Sprint's loss of over a million a couple of months ago) in the past three months, bringing their total up to 68.7 million and further solidifying their spot as the top dog in the industry. Toss in that potential Alltel deal and we're looking at a juggernaut.

Verizon also noted that though they saw some losses to AT&T from the iPhone, it wasn't much and they're not too worried. The effect since July 11th has been 'minimal' and they also claimed, as we did way back when the first iPhone shipped, that the iPhone could potentially help them by the “rising tide raises all ships” effect of people becoming more interested in smartphones in general.

Oh yes, they're making plenty of money, too:

Verizon's total operating revenues grew to $24.1 billion in the second quarter 2008. This is a 3.7 percent increase compared with the second quarter 2007, or an increase of 4.9 percent when adjusted for the spinoff of the Wireline segment's non-strategic local exchange and related business assets in Maine, New Hampshire and Vermont (non-GAAP). Total operating expenses increased 2.4 percent to $19.6 billion, comparing second quarter 2008 with second quarter 2007.

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Ah, summer. A time for basking in the sun, taking (now painfully expensive) roadtrips, and suing the everloving crap out of anybody and everybody you can think of. That's what Typhoon Touch Tech and Nova Mobility systems think, anyway; they've filed suit against pretty much every darn touchscreen manufacturer on the face of the dearth, from Apple to HTC to Samsung. You might just want to check the lawsuit to see if you're named there too, dear reader, because the list is long. The patents are for “Portable Computer with Touch Screen” and the plaintiffs contend that the infringements are “willful” (read: extra bad) because the defendants should have known about the patents; or did know; or whatever.

The best part? Typhonn Tech exists solely to create just this sort of excitement. When the 2nd link in your header is “licensing & litigation highlights,” you might be a redneck patent holding firm.

Where do you suppose these lawsuits were filed? Do we really even have to tell you? Yes, you guessed it: in East Texas' rocket docket.

Touch-screen lawsuits hit Apple, HTC, Dell, Toshiba, others [via PocketPC Thoughts]

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We'll have our thoughts on what the big shakeup in the Symbian world means for Windows Mobile in just a bit, meanwhile it's time for yours truly to crow just a teensy, tiny bit. See, Engadget points us to this this interview with Alltel CEO Scott Ford filled with crunchy industry wonk stuff. My favorite part is that apparently before they went private (and way before the now in-process buyout by Verizon), Alltel had dreams of being more than the rural-niche player they are today. My favorite part -- they apparently wanted to purchase Sprint, T-Mobile, and heck, AT&T back in the day:

I didn’t get to buy one of the national businesses, which is what I had hoped to be able to do and was something that we had tried in our old [business], back when we were a public business. I won’t go into the details of it, but we tried to buy Sprint three times, we tried to buy AT&T Wireless, we tried to buy T-Mobile. Some of these times we went with partners, some of these times we didn’t. We were doing everything we could to get to a national platform.

I enjoy this because I've often dreamed in our Windows Mobile Podcast that Alltel would buy Sprint now that they're struggling so much and it turns out that although they were interested awhile back. Glee! Of course, even this pundit doesn't know everything, because it turns out that the 'struggles' were exactly what nixed the possibility. Quoth Ford: “Sprint fell in the tank almost right on cue, they fell so totally apart that there wasn’t really an opportunity to go get them.”

Enough of that, though. There's more crunchy details in the interview about the possible merger, including possible job cuts, anti-trust concerns, and what Alltel intends to do in the interim. Hint on that last: keep working. They're rolling out EVDO Rev A as we speak and it's a good sign they don't intend to laze around on the couch playing XBox until the merger happens (if it does, of course).

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Moto may be close to hiring new handset chief

Having already tried layoffs, splits, ritual sacrifice ousters and the emergence of yet another device in the Q9 series, Motorola reportedly is close to hiring a new shaman for its wireless unit, in hopes of salvaging the company's future (read: stock price) and get back to the glory days of the RAZR.

Todd Bradley is executive VP of HP's Personal Systems group, and he's been around the block a bit.

Bradley has a 25-year management career and has held senior roles at GE Capital Corp., The Dun & Bradstreet Corp., Gateway Corp., FedEx Corp and palmOne. Prior to joining HP, he was the chief executive officer of palmOne, where he led a successful turnaround of that company and established a new category of mobile devices for the industry.

Bradley reportedly is one of two people being considered to helm Moto's soon-to-be independent wireless branch. But with rumblings last week that the handset spinoff might not happen, we'll take this with a grain of salt until the ink's dry.

Update: Former Moto marketing manager James King apparently is jumping ship to Samsung.

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MS aiming for 50% Windows Mobile Growth

When we said that Microsoft is aiming for 40% of the entire smartphone market by 2012, there was a bit of the pooh-poohing. Looks like Microsoft is undeterred in setting high goals and, well, good on them. The latest: they're hoping to grow WinMo 50% within the next year:

Microsoft has optimistically announced that it expects at least 50% growth for Windows Mobile in 2008 and 2009 as smartphone sales rise rapidly.
“Fifty percent growth is the minimum,” says Eddie Wu, the software company's managing director of OEM embedded devices Asia.
Microsoft expects to sell 20 million units in the fiscal year ending in June, far higher than the previous year's 11 million.

That actually seems realistic, truth be told. The key issue, though, is that even if Microsoft reaches the goal of increasing Windows Mobile sales by 50%, that doesn't necessarily mean they'll be picking up any market share because of it. See, the smartphone market is still growing and growing fast (having the majority of people on the planet using phones to access the internet in the near future can do that), so everybody is going to be selling more devices.

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Hoo doggy, Carl Icahn just can't keep his fingers out of sticky situations, can he? After he helped to strong-arm two of his people onto Motorola's board of directors and generally push the company into its new break-up plan, it seems that Icahn has some time on his hands -- time he intends to spend on pushing Yahoo towards accepting Microsoft's now-withdrawn buyout proposal.

His announced method is also eerily familiar to those who have followed the Motodrama: to use his 59 million Yahoo shares to launch a proxy fight in order to install buyout-friendly executives on the Yahoo board. This could get interesting again, folks.

Microsoft, maybe hold off on those talks with AOL -- Yahoo is definitely a slightly better fit.

In either case -- it's nice to see that Microsoft in interested in acquiring a company with good online service offerings (even if that's not the main reason). What would be nicer is a clearer picture of what their online services strategy is overall, 'cause between Live, the Danger buyout, and Live Mesh, we'll admit to being more than a little lost.

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After rumors of spinning off Nextel, rumors of getting bought out by Deutsche Telekom, and making some sort of weird combination of declaring uncle and making a Hail Mary pass by creating a new, separate WiMAX company... after all that we weren't exactly expecting Sprint to report anything very good about the past three months. We don't want to say it was worse than we expected, because it wasn't. Of course, we were expecting that the entire company would explode like a Death Star with a proton torpedo in its reactor vent shaft, so it would have been pretty tough for them stoop that low.

Their press release has the lowlights:

  • Loss of $253 million on $8 billion in revenue. Revenue was down 9% over last year and last year they made $253 million in profits. So that's bad.
  • Loss of 1.09 million subscribers, the vast majority of whom where standard, “post-paid” subscribers.
  • Their Average Revenue Per User (aka ARPU, who is the angry, vengeful god of wireless carriers) was down 6% over last year as well.

“As expected, our Wireless business delivered weak financial results. While the business will continue to face challenges in the short term, we are making progress in methodically attacking the sources of our performance issues. In the first quarter, we implemented a new, more focused brand campaign, we executed on our plans to take costs out of the business, and we made progress on the larger organizational and strategic decisions that we believe will lead to improved profitability in the long term,” said Dan Hesse, Sprint Nextel CEO

That Treo 800w better get released on July 22nd as expected, both Sprint and Palm are gonna need it.

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Ok, so the headline is a pitch-perfect example of why we're not writing ad copy. The gist, though, is that HTC is preparing to really start this effort to increase their brand awareness that they've been chatting it up for some time now (their December financial report was just the most recent instance of such chatting). We're also just starting to see HTC get carriers to admit that its HTC that makes stuff like the Shadow, the Tilt, the MDA, the Mogul, and so on -- we're all for these being clearly known as HTC devices. In fact, we think it's better for the carriers to associate themselves with the HTC brand than it is to pretend that the “Verizon XV6800” came out of Verizon's labs. You guys have that network thing down, stick with that.

Anyhow, back to HTC. The next step is to up and get some commercials on the air. And of course, on YouTube, as you can see in the (slightly creepy?) video above. Expect to see more from HTC in the coming weeks and months. More, that is, in addition to the mystery event on May 6th, the just-leaked images, and the fact that there's a better than 50% chance that the phone on your belt is already an HTC product. Oh, and then there's this from HTC's YouTube page:

Sure, they're playing us like a tune with this stuff, but sometimes it's nice to get played -- especially if the end result is a great device, right?

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HTC Q1 Earnings: Rockin'

With the way smartphones are selling these days, it's a little surreal to see certain companies (Cough Palm cough) posting losses. HTC, on the other hand, is raking it in just like they should be:

With the posting of the Taiwan-based company's 1Q 2008 financial earnings report, we see that HTC earned NT$32.7 billion (US$1.08 billion) in revenue for the first quarter of 2008. That's a 38.6% year-on-year increase, but a 16.2% decrease from the previous quarter. - [IntoMobile]

While revenues dropped a smidge compared to the previous quarter (that's a holiday quarter too, so no worries there), their profits increased by 24% -- cutting some operating expenses seems to have helped them there, as have the stellar sales of the Touch. HTC also expects, what with WinMo 6.1 and Android coming this year, to move up to #3 worldwide behind Nokia and RIM.

...In other words, it's truly time for HTC to quit pretending they're an underdog. Seriously, guys, you're a powerhouse, feel free to flex some muscle and get carriers to let you sell your devices with less of their crap onboard. The TYTN II ROMs are a lot better than what ships on the Tilt, for example.

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Let's get one thing clear: we're fond of this CTIA Wireless conference we're headed to. Fond because it's a hotspot of Mobile gadgetry and, just as importantly, a hotbed of people who think clearly and deeply about what mobile gadgetry can do for our lives. It's all sponsored by, naturally, the Cellular Telecommunications & Internet Association, which is essentially a trade group representing all the heavy hitters in the mobile world.

There's a rub there, though, and it's not that we're filthy Communists who hate all corporations. We just have a love/hate with certain corporations because they so often limit the way we can (and should) use our mobile devices. The term here is “Walled Garden” and we've been railing against them basically since WMExperts has been founded. CTIA does bequeath a great conference unto us and does manage to do some lobbying for good for the companies that they represent -- but they also do lobbying for evil.

Evil you say? Then why truck with evil? Answers to both questions after the break.

Bad CTIA, Bad

Imagine if your ISP loaded a bunch of crapware onto your desktop and it was required for you to get online? Or if they actually kept your computer from being able to, say, use your preferred music program? Or kept it from using USB because they want to make sure you access your peripherals via a program they sell? Or replaced your Start Menu with stuff pointing to their for-pay services? This sort of thing is standard procedure in much of the smartphone and cellphone world, and it stinks.

Now What?

But WMExperts, if this makes you so angry, why don't you just boycott the conference? Good point -- but we're going to the conference for the same reason we use Smartphones -- there's just so much compelling stuff that we either put up with or find ways around the bad stuff. More importantly -- we go because we get to talk to other people about how the “bad stuff” is crap and think about ways to make these companies change.

The good news is that we're making progress. Both Verizon and then later AT&T have both found it necessary to open up (or at least claim they're opening up) their networks to a wider variety of apps and devices. Unlimited everything plans are a great step toward making your smarthphone's relationship with the internet identical to your computer's -- i.e. you pays your money and you gets your internet, you can buy services from your ISP if you like, but you don't have to.

So CTIA: we hate to break it to you, but the day is coming when the companies you represent are going to have to give up all these nefarious ways to add more revenue streams. They're going to have to become “dumb pipes.” And we can't wait. Meanwhile, we're happy to come to your house and eat your food. Yes, it makes us hypocrites and we do feel a little bad about that, but while we're at your house, eating your food, we'll be telling your kids that there's a better way to act.

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Motorola to Split in Two - Updated

Update: Engadget has posted an insider's letter detailing just how badly Motorola has been mismanaged. Must read. Boy oh Boy, things look bad -- A split didn't work out so well for Palm, it might not work out so well for Motorola. Is this company screwed?

Looks like Carl Icahn has had his way - Motorola switched from dipping their foot in the spin-off waters to diving in completely. They're splitting in two - one company for handsets, another for enterprise services and the like. No word yet on what the two companies will be named - one hopes that the Moto brand, complete with vowels, will continue to be applied to their handsets.

They are also looking for somebody to head up their handset business -- so polish up that resume, because the way things have been going at Motorola lately, anybody could head up that company and do a better job than ZNDR (Erm, Ed Zander), the guy who pretty much ran them into the ground before the new CEO, Greg Brown, started cleaning house with a broom in one hand while fending off Carl Icahn's “activism” with a epee in the other.

Motorola, Inc. (NYSE: MOT) today announced that the Company’s Board of Directors has commenced a process to create two independent, publicly-traded companies. Today’s decision follows the Company’s January 31, 2008 announced evaluation of the structural and strategic realignment of its businesses and represents affirmative steps to position its Mobile Devices and Broadband & Mobility Solutions businesses for success, while creating value for all Motorola shareholders.
- press release

Ah well, at least we have the Motorola Q10 to look forward to.

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Looks like not only is Sprint still planning on launching XOHM, their 4G WiMAX-based network, they're feeling pretty good about it too. Electronista reports that Sprint core technology vp Ben Vos says the new network is on track (we saw a soft launch in December), presumably to the markets totaling 100 million people Sprint promised. Best part - XOHM looks to use standard IP switching to managing devices, just like the internets. That should make creating networked apps a lot easier.

...For a second there you thought we were going to talk about Sprint without bringing up the possibility of an imminent Deathwatch, didn't you? Silly rabbit. No, the wrinkle with XOHM is that Sprint isn't telling just how the expansion is going to go until their next financial results call (when they will hopefully lay out the details). Sounds an awful lot like they're trying to make sure they have some good news to offset what many expect to be a deluge of red ink and bad news.

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Windows Mobile Coming to Mini Tablets?

Here's a new terms for you: MIDS, or Mobile Internet Devices. They're someplace between a UMPC and a Windows Mobile smartphone. Think mini-tablet. Think HTC Advantage. Think something that runs Windows Mobile, that does the sorts of things you need a bigger screen for without the power-comsumption and hassles of a full PC.

Think we'll be seeing more of them soon, if ZDNet's Mary Joe Foley's post about Microsoft's latest hire is right. See, Microsoft just hired Len Kawell, whose job description is interesting indeed:

Kawell is defining the application model for occasionally connected rich Internet applications in the mobile environment. He is also responsible for scaling Windows Mobile to new kinds of kinds of devices with larger screens and faster processors – also known as Mobile Internet Devices, or MIDs.

I've always found the HTC Advantage interesting but not quite what I'm looking for. Thin it up a bit, maybe drop that keyboard (I prefer a full-sized Bluetooth keyboard), and you're looking at something that could be pretty compelling. Windows Mobile is certainly powerful enough to make a MIDS a UMPC-Killer, but the question is whether or not the market for UMPCs and MIDS is big enough to warrant it. Is is something that interests you?

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You know us. We can't pass up an opportunity to say “I told you so.” It's a weakness, really. So when Ina Fried reported on Steve Ballmer's comments during Mix '08 (the same place where Ballmer gave us Monkey Dance Redux), our beady, self-aggrandizing eyes lit up when we came to the section about the acquisition of Sidekick-maker Danger:

“The Danger acquisition is really about building up an application and service aspect on top of our Windows Mobile platform,” he said. “Danger is really a service application experience and we want to make sure we get that in market on a great set of phones.”

Sounds a bit like what we said immediately after the announcement:

What Microsoft is really interested in, it seems, is Danger's services - even though the Sidekick is the simplest of smart phones these days, it does a stellar job of storing its data “in the cloud” -- exactly where it belongs.

Crowing aside, Fried's post is also interesting because it addresses a concern that many had with both the Danger acquisition and the attempted Yahoo grab: these companies don't use Microsoft tech, while Microsoft almost exclusively uses Microsoft tech. Will Microsoft port everything over to their stuff? Well - eventually, but it sounds like they have their heads on straight when it comes to timelines. Microsoft is perfectly willing to run open source stuff for a time so they can focus their efforts on services that will be more immediately apparent to the end user. Good call.

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