Microsoft is licensing technology from its advanced-research group to a new children's video-game company called Sabi in Kirkland.

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Microsoft is licensing technology from its advanced-research group to a new children’s video-game company called Sabi in Kirkland.

The five-person company was started by Margaret Johnson, a longtime Microsoft manager who worked on Windows NT, Xbox 360 and advanced technologies with research and strategy boss Craig Mundie.

Johnson left to start the company this year after developing and testing drawing-recognition technology called “Living Ink.”

The technology is used in Sabi’s first game, called “ItzaBitza,” to animate drawings that children make on their computer using a mouse. The $19.99 game is designed to help children ages 4 and older learn to read, and it draws on research Microsoft did with educators and child-development specialists.

Microsoft is licensing the technology and taking a stake in Sabi through its IP Ventures program, which licenses intellectual property from the Microsoft Research Group. The same program led to the creation of Seattle mobile-marketing company Zumobi.

Johnson, who is funding Sabi herself, was inspired to develop children’s games after seeing the sort of games available to her daughters on the Xbox 360 and the amount of time children spend just watching TV after school.

The game was pitched internally at Microsoft, but it ended up making more sense to spin it off as a separate company.

“We didn’t see how it would fit in with the game studios, given their target audience and their strategy for their current road map, so it made win-win sense for us to … take the material that we worked on and bring this out as a company,” she said.

Sabi also plans to develop more games and extend its titles to other platforms, including Nintendo’s Wii and DS.

New on TV

Sezmi, a San Francisco TV venture that aims to rival Comcast and DirectTV, has finished quietly testing the service for several months in Seattle.

Three of the company’s top managers are based here, and Seattle was chosen primarily because of its physical characteristics.

“If you’re going to test something that requires over-the-air distribution and RF reception, there really is no better market than Seattle, both with the topography and vegetation,” said David Allred, a former Clearwire vice president who is now Sezmi’s senior vice president of marketing.

Fisher Communications, Tribune Broadcasting and Daystar Television Network participated in the tests, which Sezmi is calling a milestone that proved the viability of its technology.

Next the company will begin testing in homes and launch sometime after the first quarter of 2009.

Sezmi broadcasts mainstream TV content in high-definition by piggybacking on the digital spectrum used by local TV broadcasters. It supplements those signals by trickling down less-watched content from cable networks over broadband connections.

The service — which will include a set-top box with 1 terabyte of storage and have features such as on-demand movies — will be sold through broadband providers, similar to the way Qwest today sells DirectTV service as part of its “triple-play” bundles with voice and Internet service.

Qwest and Clearwire seem to be likely distribution partners of Sezmi, which could help them offer TV service bundles competitive with services from cable providers such as Comcast.

Sezmi isn’t ready to announce partnerships or regions that will receive the service, according to Allred.

Coming soon will be funding news, which will help carry it through until it makes money from subscriptions.

My guess is, it will announce the funding next month, setting it up for a bigger announcement about launch partners at the Consumer Electronics Show in January.

This material has been edited for print publication.

Brier Dudley’s blog appears Thursdays. Reach him at 206-515-5687 or