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Wireless - Monday, February 11, 2008

Rebuffed By Yahoo!, MSFT Buys Danger Inc.

Danger Inc. recently filed for an IPO, but Microsoft has stepped in to snatch the Palo Alto-based wireless handset hardware+software maker. No financial terms have yet been disclosed.

What does this say about Microsoft and the M&A environment? The Yahoo! deal is important but it's just of may M&A balls that MSFT has in the air. Also, given the lousy market environment, selling to MSFT at a fair price is not a bad option for most.

Danger has raised around $142M in total VC funding since 2000, including a Series E round in late 2006 at a post-money valuation of around $187M (PeWire number). Top shareholders are Mobius Venture Capital, Redpoint Ventures, T-Mobile, Softbank Capital, Motorola, Meritech Capital Partners and VSP Capital.

Danger and its partners have done a nice job partnering with celebs like NBA Phenom Dwayne Wade who has his own line of Sidekick.

BTW - we have owned several of Danger's Sidekick's and found them to be sound, if fragile devices. They don't have the brands of Blackberry or iPhone but Microsoft seems to have made a strong purchase here. Also interesting is that Andy Rubin, one of the founders of Danger Inc. is now running the show on Google's wireless world.

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