Handspring shakes on content deal with MSN

Handspring and Microsoft's MSN division announced an agreement on Tuesday, making MSN Mobile the first destination for Web-surfing Visor owners.

Handspring's decision is significant because its handhelds run on the Palm operating system -- the main rival to Microsoft's Pocket PC operating system for handhelds. Although Handspring recently extended its licensing agreement to use the Palm OS until 2009, the deal is non-exclusive. Also, Handspring executives have said in the past that they are open to using other operating systems, though there are no plans to do so.

Handspring spokesman, Allen Bush, said the company sees the MSN and Pocket PC groups as separate entities.

"Our announcement today doesn't have anything to do with the other part of their business," Bush said of Microsoft's Pocket PC operating system group. "We wanted a good-quality content partner, and that's what they are."

Visors, in fact, compete with handhelds that run both the Palm and Pocket PC operating systems. Competitors include Palm, Sony, Compaq Computer, Hewlett-Packard and Casio.

Terms of the deal were not disclosed, though a Microsoft representative did say there is "no specific date for termination."

All Visors have Springboard expansion slots that can be fitted with the VisorPhone to give owners the ability to make phone calls and browse the Web wirelessly. California-based Handspring also announced on Tuesday that it has cut the price of the VisorPhone by $50 (£35) to $249 (£174). The move comes amid a price war that's erupted between Palm and Handspring.

Visor owners who surf the Web use Handspring's Blazer browser, which the company acquired when it bought Bluelark Systems for $16.1m (£11.3m) in stock, in December.

The new version of Blazer, which incorporates MSN, is available for $19.95 (£13.98) or comes free on a CD bundled with VisorPhone. The CD includes browsing, messaging and e-mail applications. Blazer was previously free as a download.

In addition to MSN Mobile, Google's search engine will appear on the first page that Visor owners will see when they begin to surf the Web.

MSN is Microsoft's Web portal, offering content and services such as news, weather forecasts and e-mail. The site has more than 230 million visitors per month, according to the company. MSN Mobile is the version tailored to mobile devices.

"We recognized that Web access and content are key features for these devices, and we want to provide our users with both parts of that," Bush said of the MSN deal.

IDC analyst, Alex Slawsby, agreed. "Communications may be king," he said, "but content is just as important -- especially in these types of devices, which have an emphasis on data delivery first, and voice, second."

Handspring and MSN may collaborate more in the future. Both sides said they are exploring future opportunities, but declined to mention any details.

"We're leaving the door open to the future," Bush said.

Microsoft also announced Tuesday that it signed an agreement with United Airlines. Under the deal, passengers will receive a special Web browser and incentives, such as frequent-flier miles, if they switch to MSN.

Both agreements are part of Microsoft's .Net strategy, which MSN Product Manager, Mark Wain, describes as an effort to make Microsoft's content available anytime, anywhere.

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