Palm Is For SalePalm Is For Sale

It looks like Palm has officially put itself up for sale. Sales of WebOS devices haven't been setting the charts on fire and the market has driven its stock price to record lows in recent weeks. Will a new owner have the resources to revitalize WebOS and make it a true competitor in the smartphone market?Bloomberg is reporting that Palm is working with Goldman Sachs Group Inc. and Frank Quattrone's Qatalyst Partners to solicit bids early this week. Palm's stock price hit a high of $18.09 last summer after the WebOS powered Pre started shipping but has been on a downhill trend since then. It hit $3.65 per share in the last few weeks, though it has bounced back to above $5 last week on buyout rumors. It looks like those rumors were true and the stock will no doubt surge on Monday after the market opens.

All of this just days after Palm CEO John Rubenstein claimed that rumors of Palm's demise "defied logic" according to a report by Fierce Wireless. He must have known at that time that the company was being put up for sale. You don't just call up investment bankers on Friday afternoon and decide to start taking offers on Monday.

The problem wasn't WebOS. Technically, it held its own against market superstars iPhone and Android. It just didn't sell well for a number of reasons. The original ads for WebOS were a complete mystery, and a bit creepy as well. Sprint, being a second tier network, was the wrong one to launch on with an exclusivity agreement. Even now that the Pre and Pixi are on Verizon, Android is getting more attention from the nation's largest carrier.

The real question is, will a new owner be able to save WebOS? It will be competing in a market against successful companies like Apple and Google, and Microsoft is getting ready to jump in with both feet with their enormous cash and manpower reserves this fall. RIM is still king of the enterprise devices.

We'll see this week who makes a bid for the company. Lenovo, Dell and HTC have all been mentioned in rumors. Can they, or someone else save the company?