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Palm buys Be

Staff, technology snapped up for $11m

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Updated Be has been sold - as we predicted a week or so back (see Be takeover imminent) - to Palm.

The alternative-OS company today admitted its assets and technology have been sold to Palm for $11 million worth of the PDA maker's stock.

Once the sale has been made - Be's directors have approved the move, but they'll need the backing of shareholders - Be will be wound up. If shareholders give the sale their support, the deal will be completed during Q4.

We'd heard rumours that Palm was Be's suitor, but found little to back it up. It's certainly hard to see at first any real synergy between the two. Be developed multimedia-oriented desktop and Net appliance operating systems, while Palm develops operating systems for organisers.

But think again. As PDAs become more geared toward wireless Net access, and through 3G networks, able to cope with ever richer media types, Palm will need expertise in handling those kinds of media. Indeed, a modern PDA is as much a Net appliance - arguably more so - than the set-top box image most of us think of when we consider boxes an OS like Be's BeIA might run on.

Whatever Palm gets, it's hardly spending big money on the company. Its $11 million gets technology and a staff of around 57 engineers, which isn't a bad price - especially when it's being paid for with stock.

Whether Palm will incorporate BeIA into the Palm OS, use it as the basis for a future PDA operating system, branch out into larger-scale appliances, or just cream off the multimedia expertise, the company has yet to say. Whatever it does, the acquisition of Be gives it a lot of scope to develop some interesting business models.

Indeed, Palm CEO Carl Yankowski has just said: "This move will help us expand the PalmOS platform into broader markets using their multimedia media and Internet expertise." ®

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