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Mobile Net could draw Nokia, Microsoft closer

The companies could soon be in business together distributing mobile domain names. What happened to their cell phone OS rivalry?

Are mobile software rivals Nokia and Microsoft calling a truce?

The two companies became competitors in 1999, when Microsoft introduced a cell phone version of Windows to take on Nokia's operating system. But the companies' participation in an effort to set up a mobile Internet, announced Wednesday, is a sign that those once-icy feelings are thawing.

As previously reported, Nokia and Microsoft are among nine companies that want to create a for-profit registry for mobile Web addresses. The as-yet unnamed business is the first time the world's largest handset maker and the PC software king have been willing to take prominent roles in the same venture, according to sources.

It also represents a shift in the way Microsoft regards Nokia. "We view them as less of a competitor and more as a potential customer and partner," a representative for the software maker said on Wednesday.

The companies have been rivals in the cell phone operating systems market for about five years, after Microsoft entered the fray with its software, the latest version of which is Windows Mobile Smartphone 2003. That competes with the Symbian OS, created by the company of the same name, in which Nokia has a near-majority stake. Nokia also develops its own cell phone software.

The thaw in relations stems from the common ground the companies have in the creation of wireless broadband services for businesses, IDC analyst Kevin Burden said.

Though Nokia has been aligning itself with tech leader IBM, it's likely that Microsoft will win in the corporate wireless market because of its dominance in the business computer market, according to Burden. "Nokia could be looking to Microsoft for a better enterprise offering," he said.

A Nokia representative was unavailable for comment on Wednesday.

One of the biggest obstacles for the mobile Web registry is the Internet Corporation for Assigned Names and Numbers (ICANN), which must approve the addition of the proposed mobile domain to the Web's navigation system. Without that crucial approval, it's likely that the joint venture will be dissolved. The partners intend to file an application to ICANN on Monday and expect the review process to last at least three months.

"At this point there are nine companies submitting an application, and upon that application's approval, those investors and any additional investors who may join later are going into business together, including Nokia and Microsoft," a Microsoft representative said.