Microsoft Corp. is betting $20 million dollars that it can make its Win CE operating system into a key part of future Internet-enabled appliances.
In an announcement made Wednesday, Microsoft said it will pay Spyglass -- the Naperville, Ill., company most famous for creating the Mosaic Web browser -- $20 million to design and integrate Windows CE applications for Internet devices.
"They have a huge system integration expertise and a history of doing customization for Internet-based products," said Tony Barbagallo, group product manager for Microsoft.
Microsoft will use Spyglass to create mainly consumer-based products and to develop new Web applications.
"I could see pushing XML and digital cable platforms, for example. These things mesh with Microsoft initiative," Barbagallo said.
Both Microsoft and Spyglass officials stressed that the $20-million-over-three-years agreement is not an investment but rather a payment for services rendered to develop new products.
The deal highlights a trend most recently expressed by IBM. Company officials downplayed their $1 billion losses in the PC division by claiming that the age of the PC is dead and the age of networked appliances is at hand.
The current Microsoft Spyglass deal appears to support that trend.
Earlier this year, Spyglass reached agreement on another multimillion-dollar deal with General Instrument's to create services and applications for its digital cable platform
Microsoft Corp., in Redmond, Wash., can be reached at www.microsoft.com. Spyglass Inc. can be reached at www.spyglass.com.