Microsoft is reportedly investing in Cyanogen, a company that builds custom versions of Android while staying outside the purview of Google.
Though the news is yet to be made official, insiders familiar with the matter confirmed Microsoft is putting money into Cyanogen, which is building a version of the Android mobile operating system outside of Google's auspices, reported the Wall Street Journal. It is expected that Microsoft would put up somewhere around $70 million of equity financing. This fund infusion would eventually value the company in the high hundreds of millions.
Though the funding from Microsoft doesn't seem like much, it is expected to grow quickly, as other investors who have been sitting on the fence decide to dive in. Apparently, many strategic investors have expressed interest in Cyanogen because they too are keen to diminish Google's control over Android. The identity of these investors has been kept under wraps for now. Understandably, given the sensitivity of the issue, Microsoft and Cyanogen are being tight-lipped about the whole investment deal.
It is futile to mention that the investment seems rather odd considering the fact that Microsoft itself sells smartphones that run on its own Mobile Operating System (OS) – Windows Phone OS – that will soon have a unifying version that runs seamlessly across majority of it hardware platforms. However, from a commercial perspective, Microsoft's Windows Phone OS has a miniscule 3 percent of market share. Microsoft is well behind Google's Android and Apple's iOS. Perhaps such desperate times might be forcing Microsoft to consider unconventional and unorthodox steps that might seem contradictory on the surface.
Will Cyanogen be Microsoft's dark horse? Kirt McMaster, Cyanogen's chief executive, confirmed more than 50 million people use one of the versions of the Cyanogen Android operating system. Moreover, the majority of the users have installed it in place of their phone's initial operating system. To boost the pace of adoption, Cyanogen is working on deals with hardware makers to install the software on their devices.
Cyanogen offers an alternate version of the Android mobile operating system free of many restrictions that Google has subtly incorporated. The 80-person company claims to have a volunteer army of 9,000 software developers working on its own version of Android.
A third mobile ecosystem as an alternative to rivals Google and Apple could help Microsoft better distribute its apps and services on smartphones. In other words, Microsoft is desperate to offer more exposure to its apps and software that Google simply doesn't allow on its own Android platform.
Cyanogen is already a hit in China, where over 37 percent of Android shipments had the custom version installed. Perhaps Microsoft could beat Google with its own mobile OS using Cyanogen's Android.
[Image Credit | 9to5Google]