Microsoft buys startup to boost Web, mobile services

Microsoft has purchased a startup in Seattle that provides Web-based, multimedia file-sharing services

Microsoft has purchased Seattle startup WebFives, which provides a Web-based file-sharing service for Internet and mobile video, photos, audio, and blogs, according to a message posted on the startup's Web site.

WebFives, previously called Vizrea, was founded by former Microsoft Distinguished Engineer Michael Toutonghi, who helped pioneer the Media Center version of the Windows OS, many of the features of which found their way into Windows Vista.

On the WebFives Web site, a message attributed to Toutonghi said Microsoft agreed to purchase the company in November, and WebFives will close and shut down its service on Dec. 31. The service gives users a hosted Web site to which they can automatically upload multimedia content from mobile devices, as well as other features.

At that time, "any content previously uploaded to WebFives user accounts will be deleted from our servers and no longer available online," according to the post. Microsoft will incorporate WebFives' services into its own products and services, Toutonghi wrote. WebFives services also include a mobile Web site, widgets and a WebFives media player that can be put on social networking sites such as Facebook and MySpace, as well as other social-networking and messaging services.

He hinted that those products and services may include Microsoft's Windows Live Web-based services and MSN online multimedia content site. "I encourage you to look at MSN Spaces and/or Windows Live services as an alternative to WebFives for serving your video, photo, music sharing and blogging needs on the Internet," Toutonghi wrote.

Microsoft indeed has been looking for ways to boost the value, and thus revenue, of its Online Services Group (OSG), which oversees MSN and Windows Live. Microsoft hopes these properties will help boost its online advertising revenue to compete with Google.

The company also has said its mobile device strategy, the linchpin of which is its Windows Mobile OS, will be a priority for the company as a way to diversify its revenue, which primarily comes from its Windows OS, Office business productivity suite and server software such as the SQL Server database and other enterprise products.

In November 2005, Microsoft rebranded many of the former MSN services Windows Live, and announced its intention to roll out more services to complement its popular e-mail and instant-messaging services. After a long beta period in which users could access and use a host of services for free, Windows Live. 1.0 emerged from testing last month. Microsoft divides its Windows Live offerings into two sets -- online services such as Windows Live Hotmail and applications that users install on their PCs, such as Windows Live Messenger and Windows Live Photo Gallery.

Microsoft also purchased digital media services agency aQuantive for US$6 billion this year, a deal that closed in August and was the company's most expensive acquisition to date. So far, however, its online investments have not done much to boost OSG revenue, and analysts remain critical of the company's efforts.

Microsoft public relations representatives reached Monday said they were not aware of the WebFives deal and could not immediately comment.

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Elizabeth Montalbano

IDG News Service

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