Microsoft Corp. is holding discussions with mobile startup Cyanogen Inc. about creating a version of the Android mobile-operating system that’s more friendly to Microsoft services, according to a person with knowledge of the matter.
Microsoft may invest in Cyanogen and strike a commercial partnership, said the person, who asked not to be identified because the talks are private. The companies are discussing deal terms, though Microsoft hasn’t committed to an investment, the person said.
Cyanogen is raising a round of financing that could value it at at least $500 million, said another person with knowledge of the matter. The Palo Alto, California-based company has built an operating system based on Android that lets people customize their mobile device and content, according to its website.
Peter Wootton, a spokesman for Redmond, Washington-based Microsoft, declined to comment. Vivian Lee, a spokeswoman at Cyanogen, said the company doesn’t comment on speculation and rumors.
The talks illustrate how Microsoft is trying to get its applications and services on rival operating systems, which has been a tenet of Chief Executive Officer Satya Nadella. Microsoft has in the past complained that Google Inc., which manages Android, has blocked its programs from the operating system.
Cyanogen counts venture capital firms Benchmark, Andreessen Horowitz and Redpoint Ventures among its investors. Bloomberg LP, the parent of Bloomberg News, is an investor in Andreessen Horowitz.
The Wall Street Journal earlier reported that Microsoft is investing in Cyanogen. Technology blog The Information reported in October that Cyanogen was seeking a new funding round.