WSJ.com - Microsoft Mulls Sony Partnership To Counter iPod's Success: "Microsoft Corp. has watched with envy as Apple Computer Inc. and its slick iPods have stolen the digital-music spotlight. Now the software titan is fighting back.
Microsoft is enlisting a raft of new allies for its growing ambitions in digital entertainment -- and even may pursue an alliance with another industry giant galled by Apple's runaway success: Sony Corp.
In a speech last night at the Consumer Electronics Show in Las Vegas, Microsoft Chairman Bill Gates outlined agreements with Viacom Inc.'s MTV Networks, digital-video-recorder pioneer TiVo Inc., Yahoo Inc. and others to make more music and TV programming available through Microsoft Web sites and on devices using Microsoft software.
And in an interview earlier this week, Mr. Gates suggested that both Microsoft and Sony could benefit from a broad partnership in digital entertainment. Specifically, Mr. Gates said that both companies 'have a lot of incentive to work together' in digital-music 'infrastructure,' including online-music services and protection against improper music copying."
Makes a lot of sense, especially since Sony has killed its Palm OS-based PDAs (at least in North America) and is facing new competition with companies including Apple, Dell, HP, and others.