The handheld device maker today announced the launch of Palm Ventures, an investment group dedicated to funding mobile-technology companies.
Palm Ventures will initially distribute $50 million to members of the so-called Palm Economy, the company's nickname for the network of third-party software and hardware makers that create products designed to work with the Palm operating system.
Palm is the leading handheld device maker, with about a 60 percent share of the worldwide market, according to market researcher International Data Corp. The company also licenses its operating system to Handspring and Sony, which recently unveiled its own Palm-based Clie personal digital assistant.
The venture funds come from Palm's war chest of $874 million, raised in a blockbuster initial public offering in February. Companies funded through the Palm Ventures group may be offered other business opportunities with the handheld company, Palm said.
Palm has credited its success to its loyal corps of outside developers, which is made up primarily of independent software programmers who create free or limited-use software. Although Palm has relationships with larger companies like Siebel Systems and IBM, the bulk of those partnerships are insignificant in terms of revenue opportunities for the company.
Palm is not the only technology company looking to boost its investment portfolio by seeding like-minded start-ups. Dell recently announced it would work with two venture capital firms, Austin Ventures and Kleiner Perkins Caulfield & Byers, as well as its own venture group, to offer PCs and computing technology to start-ups. IBM and Sun Microsystems have similar initiatives.
"The handheld market is growing, and Palm is committed to investing in opportunities that will accelerate this growth," Robert Hayes, director of Palm Ventures, said in a statement today. "Our success to date is in large part due to the many entrepreneurs in the Palm Economy who have developed products and services complementary to our own offerings."