Microsoft spins out technology to 2 European ventures

Microsoft is spinning out some of its software technology to two small European tech ventures, as part of a programme to speed development of innovations from its labs.

In one deal announced on 6 June in Brussels, Microsoft took a stake of about 10% in a London start-up, Skinkers, in exchange for letting the smaller firm use Internet-publishing technology developed in the software giant’s Cambridge, UK, laboratory. Jean-Philippe Courtois, president of Microsoft International, valued the transaction at about £2 million. The technology is the first spin-out from the company’s Cambridge lab.

In a second deal, Microsoft licensed mobile-video technology from its Beijing laboratory to a small Irish company, Vimio PLC. No value was disclosed.

The transactions are the eighth and ninth technology agreements that Microsoft has reached since May 2005 with small tech companies in the U.S. and Europe, as part of a program it calls IP Ventures. David Harnett, senior director of the program, said it aims to get certain technologies developed in Microsoft’s laboratories out into the marketplace as quickly as possible, by teaming up with small, fast-moving entrepreneurial companies. Typically, Microsoft either licenses its technology to the firms or, as in the Skinkers case, also takes an equity stake.

Skinkers is a start-up founded in 2002 around so-called “push” technology – automatically zapping news, information, and alerts via the Internet onto a customer’s desktop. At present, it provides software to broadcast Internet news flashes for the BBC, the Wall Street Journal, Sky and the Financial Times, among others. Under the deal with Microsoft, the company hopes to speed up delivery of the news alerts by using so-called peer-to-peer networking – that is, automatically passing the alerts across the world from user to user, rather than from a central computer to individual users.

David Long, managing director of Skinkers, said Microsoft will also incorporate “platform” technology for Skinkers-style alerts into its next-generation Windows computer operating system. Skinkers currently has 42 employees and, in the year ended March 31, had turnover of about £2 million. It recently completed a £2 million financing round.

Vimio is a small Irish company that helps mobile-phone operators in Bahrain, Saudi Arabia, Jordan and elsewhere provide music, video, ring tones and other content to their subscribers. The Microsoft technology it’s licensing lets the mobile-phone companies change the image-quality in real-time – cutting back the picture-quality when there’s heavy demand, and upgrading the picture-quality when there’s fewer users. That ensures that the video –of a live football match, for instance – continues to play in real-time on a customer’s mobile phone, rather than stopping and starting, no matter how many people at once are trying to use the service.

Vimio started from research at Sweden’s University of Umea, and was purchased by a group Irish entrepreneurs in 2002. It currently has 34 employees, said Vimio CEO Malachy Harkin. It is listed on London’s small-company exchange, AIM.