Tuesday, August 3, 2010
KIN Total Cost Nears One Billion Dollars
Posted by Ed Hansberry in "Windows Phone Talk" @ 02:00 PM
So just how much did the whole Danger acquistion and KIN project cost Microsoft? It looks like the total cost is approaching $1,000,000,000. Ouch. Engadged discovered there was a $240 million writeoff in Microsoft's June 30, 2010 financial statements and notes that it paid $500 million for Danger. What is not included in any of these numbers are:
- Routine operation expenses Microsoft incurred for the unit since the Danger acquistion.
- Hardware upgrades and purchases for the Sidekick infrastructure
- Revenues from the Sidekick business (that would offset any costs)
- Expenses, penalties and fees incurred when the Danger servers went belly up and ate all of the Sidekick data and Microsoft had to go in and fix it
- Marketing costs for the KIN
All told, I suspect the venture wound up costing Microsoft over a billion dollars above any revenue it got from the Sidekick business. A billion dollars is a lot of money, but in the world of acquisitions, I suspect more money was blown when HP acquired Compaq or AOL acquired Time Warner.