Amidst Google Lawsuits, Skyhook Sees Victories With App Developer Deals and Press on Privacy Concerns—And Isn’t Looking to be Acquired Just Yet

5/5/11Follow @xconomy

It’s no secret that some big West Coast players have shown interest in Boston’s homegrown mobile technology lately. In the past few weeks, San Jose, CA-based eBay (NASDAQ: EBAY) has bought Where, a location-based mobile advertising and recommendations provider, and mobile payments startup Fig Card, to roll into its PayPal division.

But Boston-based Skyhook Wireless has a slightly different relationship with a Bay Area Internet giant. It’s been wrestling in court with Mountain View, CA-based search engine giant Google (NASDAQ: GOOG), around its location-finding technology for mobile phones. Skyhook has sued Google for alleged patent infringement, as well as alleged interference by Google with deals Skyhook had inked with Motorola and Samsung for devices running on Google’s Android smartphone platform. (You can read more about the lawsuits here and here.)

It looks like there’s still a long way to go for that case to be resolved—last week lawyers from both sides met before a Suffolk County Superior Court. Google’s lawyers asked for the judge to throw out the case, on the basis that Google had pre-existing agreements with device makers, in which some of its standard apps automatically collected location data. Meanwhile, Skyhook’s lawyers re-emphasized their claim that Google road-blocked Motorola and Samsung from following through on agreements to ship smartphones with Skyhook’s XPS software, which determines a user’s location using WiFi, cellular, and GPS access points.

Yesterday, the judge denied both Google’s motion to dismiss the case and for a summary judgment, court documents show. The case will now to go into full discovery to gather the necessary documents and depositions, a period that could take six months—a timetable suggested by Google lawyers last week.

So it’s a small victory for Skyhook, but its legal work is just beginning. “Their goal is to try and bleed us out and our goal is to try and make sure we get the facts brought to light,” Skyhook CEO Ted Morgan told me this week.

Meanwhile, Skyhook has been nabbing some bigger victories out of the courtroom. This week it announced that MapQuest, the San Francisco-based mapping division of AOL, will use Skyhook’s technology in an upcoming turn-by-turn navigation app for Android phones. Skyhook has inked similar deals with UberMedia, Citysearch, and Priceline over the past few months.

“In the meantime what we’re doing is going after all the top Android apps that offer location,” Morgan says. “That way we’ll get on every Android device, but it will be through the apps instead of device makers.”

Google’s and Apple’s impending appearances before a U.S. Senate committee also shed some positive light onto Skyhook’s technology, he says. Lawmakers have expressed concern over reports that Apple logs user location data on mobile devices. Google, which has claimed that data collected from its Android devices is opt-in and made anonymous has also been asked to testify at the Senate Subcommittee on Privacy, Technology, and the Law hearing next Tuesday.

Skyhook’s technology collects user location data, but doesn’t connect the dots over time to show that locations came from a single device, and essentially a single user, Morgan says. Those privacy protection measures can be easier to lose track of for companies whose focus isn’t primarily on location services, Morgan says. Meanwhile, “these have always been very big topics in the location world,” he says, and Skyhook has been dealing with them since its inception in 2003. “For device makers who don’t want to get hauled down to DC, who do you work with?”

Given the attention surrounding location technology, recent acquisitions in the Boston area, and the resources required in the lawsuit, one might wonder if Skyhook will be the next Boston mobile startup to get acquired. Some outside observers have predicted Intel as a potential buyer, given Skyhook’s existing customer contracts with the chipmaker (and Intel’s relative lack of location technology). Qualcomm, TCS, Cisco, Microsoft, and Nokia might also be candidates, says Mark Lowenstein, managing director of Mobile Ecosystem, a Brookline, MA-based wireless/mobile consulting and advisory services firm.

“An acquisition would make sense,” Lowenstein said in an e-mail. “Skyhook has developed IP which complements existing location solutions, but the space is also complex as can be seen from the various lawsuits.”

What does Skyhook have to say about the possibility of getting acquired? “It’s not what we’re focused on right now,” Morgan says. The company is profitable, thanks to deals that place its technology into consumer devices like gaming systems (Sony) and chip-based devices like tablets, netbooks, and handsets (Intel). Morgan says we can also expect to see customer deals for the company in digital camera and e-book reader applications.

“The goal is to keep adding devices—get more units shipped and that’s how we get paid,” he says. “If we can keep doing that, I think there’s going to be a lot of options.”

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