Microsoft to Acquire Home Automation Startup

By Roger Baettig | January 03 2013 12:53 PM

Microsoft (NASDAQ: MSFT [FREE Stock Trend Analysis]) has purchased technology startup id8 Group R2 Studios, according to The Wall Street Journal. The startup, founded by Blake Krikorian, recently launched a Google (NASDAQ: GOOG) Android application that allows users to control heating and lighting systems from their smartphone.

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Microsoft reported first-quarter net income fell 22 percent as PC sales lagged and customers awaited the final release of the Windows 8 OS.

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id8 Group R2 Studios was founded in 2011 and less than one year later gained the attention of some of the largest technology companies. The Silicon Valley startup operates as a subsidiary of id8 Group Productions.

Krikorian is a serial entrepreneur who started Sling Media -- a company that marketed the Slingbox. The Slingbox allows a user's TV signal to be accessed anywhere in the world through the Internet. EchoStar Communications purchased Sling Media for $380 million.

As part of the takeover, Krikorian and a small team will join Microsoft, which will not only purchase the startup, but also patents for controlling electronic devices. The purchase price and other terms of the acquisition were not immediately available.

AppleInsider reported that Apple (NASDAQ: AAPL), Google and Microsoft were all interested in the company to expand further into the home automation space -- which is gaining in popularity among consumers as prices for products based on the technology continue to fall.

Apple had an interest in the company as a way to produce accessories for its products including the iPhone, iPod, and iPad. The company also filed patent applications for home automation including one for use near field communications to control cable boxes, sprinkler systems, and other products equipped with NFC.

Google has been public about its interest in home automation. At a 2012 event, the company announced plans to release an LED light bulb controlled by Android devices.

Microsoft has an interest in home automation to complement its current product lineup. The company also wants to develop apps specific to Microsoft mobile platforms as well as competing operating systems including Apple's iOS.

Microsoft is no stranger to acquisitions. Most recently, the Windows-maker purchased Skype in 2011 for $8.5 billion.

Microsoft traded down slightly on Thursday, dropping about 0.65 percent.