Palm invests in startup to woo corporate customers

The handheld giant did not disclose the size of its stake in San Francisco-based Kenamea, which is completing a second round of financing. But Kenamea CEO John Blair said the two companies are working together to help Palm offer business customers better access to information than has traditionally been available via a handheld.

"What Palm is about is getting reliable access to information regardless of where you are," Blair said. "That vision requires you to connect all of the existing systems...and Palm clients."

Blair said Kenamea's communications link allows for a faster and more reliable exchange of data over existing communications networks.

Although this is Palm's first disclosed investment in a company aimed at the corporate market, that market is clearly a focus for Palm and an area where the company expects significant competition from handhelds running Microsoft's Pocket PC operating system.

"When you look at the enterprise space, it makes all the sense in the world to be investing in these companies," said Robert Hayes, director of the Palm Ventures investment arm. "That is how you grow the market."

Kenamea is testing its service with several customers and expects to have 70 such pilot clients by March.

Blair and Bob Pasker started Kenamea in August 1999. Pasker was a developer of the WebLogic Application Server, a product that helped launch the market for Java application servers.

Palm has made a number of investments since launching its Palm Ventures fund in September, including investments in health-related start-ups ePhysician and HealtheTech.