Bill Gates, Microsoft's chairman, said the companies decided to put their rivalry behind them more than two years ago, when Jeff Hawkins, a Palm founder, visited Microsoft to discuss a development and marketing agreement. But Mr. Gates said a partnership made no sense until Microsoft was well along in developing Windows Mobile 5.0, which it released in May.
"Palm always did great work," he said. "We lusted after some of the things they did well and wanted to combine them with some of the things that we did well."
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