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Microsoft's diversification continues

by Scott Bicheno on 29 August 2008, 16:01

Tags: Microsoft (NASDAQ:MSFT)

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Lots of eggs in lots of baskets

There have been a couple of announcements emanating from Microsoft this week that indicate the extent to which Microsoft is willing to diversify in order to ensure its future prosperity.

The first was the signing of a cross-patenting agreement with camera company Nikon. It looks like Nikon is paying Microsoft to get access to some of its IP (intellectual property), including RAW processing technology, but the arrangement is also reciprocal.

A major driver for this deal could be Microsoft's need to appear to be sharing at least some of its IP with the rest of the world in order to avoid future fines, or worse, for anticompetitive practices. Microsoft even has a website dedicated to showing how keen it is to share its toys with the other kids.

However, the deal also seems to reveal a desire by Microsoft improve its digital imaging offering, both on the software and hardware side, so who knows what products that might yield.

"This agreement will extend and enhance our already successful, long-standing collaboration with Nikon, and will allow us to provide even better products to our customers," said Josh Weisberg, director of the Rich Media Group at Microsoft.

Ecommerce

Then today we saw Microsoft's first major acquisition since the Yahoo! deal went Pete Tong. It has bought a company called Greenfield Online, which is comprised of an online price comparison division and an internet survey division.

It looks like Microsoft is only interested in the price comparison bit, which is manifested primarily through the website Ciao, as it has already arranged to sell on the internet survey bit to an unnamed third party as soon as the deal is done. Microsoft is paying approximately $486 million for Greenfield, a good chunk of which it should recoup with the immediate sell-on.

Microsoft might be trying to create its own Yahoo!, piece by piece, from the acquisition of a number of smaller web companies

This won't be Microsoft's first foray into ecommerce websites; it founded travel site Expedia in 1995 before selling it on. However, it could be an indication of how Microsoft will go about achieving what appears to be its number one objective: getting a bigger piece of the online pie.

Microsoft was hoping to achieve this in one go by acquiring Yahoo!, but now it might be trying to create its own Yahoo!, piece by piece, from the acquisition of a number of smaller web companies.