exclusivity agreement around its intention to acquire Musiwave SA, an Openwave company and a leading provider of mobile music entertainment services to operators and media companies. The acquisition would bring Musiwave’s relationships with music labels, device makers and mobile operators that deliver digital entertainment to consumers, together with Microsoft’s Connected Entertainment technologies and services, including Windows Mobile, Zune, MSN and Windows Live. Should the transaction proceed, Musiwave would continue to operate out of its current headquarters in Paris.

“Microsoft and Musiwave share the same philosophy in working with hardware and mobile operator partners to deliver great experiences for mobile device users,” said Pieter Knook, senior vice president of the Mobile Communications Business at Microsoft. “Bringing Musiwave on board would provide an opportunity for Microsoft to explore new areas in the mobile space previously untapped, and to showcase the power of software plus services. This contemplated acquisition reflects Microsoft’s recognition of the software and technology expertise in Europe.”

“Musiwave would bring key assets to us as we continue to bring our vision of Connected Entertainment to life,” said J Allard, corporate vice president in charge of music at Microsoft. “Its software expertise and extensive relationships with operators and music companies would help us take our products and services to the next level, giving people access to whatever entertainment content they want, whenever and however they want it.”

Demand for Mobile Music Services Drives Innovation

Today, the mobile music device market is growing at a rapid rate. According to technology research firm Ovum, 1,106 million mobile music phones will be shipped worldwide in 2010. Mobile operators are continually looking for ways to deliver digital entertainment to their customers, and have looked to companies such as Musiwave to deliver music services that help provide the necessary infrastructure. As a provider of white-label music solutions to mobile operators in Europe, Musiwave has helped to bring a rich selection of millions of ringtones, full-track downloads and music videos to consumers.

Musiwave also has a rich history of working with a wide variety of device-makers, across a diverse group of software platforms that produce music and data-capable mobile devices. Today, software developed by Musiwave can be found on most handsets available in Europe.