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Rumor: Palm and RIM to merge?

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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Tom Krazit

Palm's got the gadget lovers, Research in Motion's got the suits. Might this be a match made in heaven?

A buzz is starting to build around the possibility that Palm and RIM might announce plans to merge on Thursday, when both companies plan to announce quarterly earnings. We noticed it on Technology Evangelist, although it has popped up in other places.

The two well-known mobile computing companies do complement each other. Palm has been searching for ways to connect with enterprise customers for years, finally agreeing to use Microsoft's Windows Mobile operating system on one of its Treo phones to improve its corporate chances. Office workers across the country have been dealing with management-by-BlackBerry for several years, but isn't a major player in the consumer market.

But trade combinations that seem drawn from the fantasy sports world don't usually happen in the business arena. With a market capitalization of $1.86 billion at the close of business Monday, Palm's an option for a company like RIM, which has a market cap of $12.4 billion and more than $700 million in cash. Earlier this year, a major Palm investor wrote a letter to the company urging a sale to a larger company like RIM while Palm was still an attractive company.

Freed from its legal battles with NTP over the patents to the BlackBerry technology, RIM might be looking to make a move, but it faces a fresh legal challenge from Visto, another wireless e-mail vendor.