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Nokia to acquire Plazes, eyes geo market

In a market where start-ups in the location-based mobile apps are a dime a dozen, Nokia makes its pick for its growing software arsenal.

With more GPS-enabled handsets on the way--iPhone 3G, I'm looking at you--there are few Web 2.0 niches that are more hyped-up than location-based services.

The latest evidence: Nokia announced Monday that it plans to acquire Plazes, a start-up still in private beta.

Financial terms of the deal, which is expected to close in the third quarter of 2008, were not disclosed. Plazes, which is based in Zurich, Switzerland, but works primarily out of Berlin, will become part of Nokia's Software and Services division. Plazes' technology will likely be worked into future mobile apps.

It's good news for Plazes, which has 13 employees. The track-your-friends-on-a-map application was in a tight market that kept growing tighter, with no clear winner emerging.

"When we started in 2005 the potential of that space might have been obvious, but it was an uphill battle nevertheless, with so many concepts gone sour before," a posting Monday on the Plazes blog explained.

Indeed, the first breakout start-up in the space, Dodgeball, was quickly acquired by Google. And instead of gaining mass-market success, it faded away.

Since then, start-ups like Loopt (which had some prominent stage time at Apple's Worldwide Developers Conference this month), Whrrl, and Brightkite--many of which do more or less exactly the same thing--have popped up and gained minor to moderate buzz. By getting acquired, Plazes has pulled itself out of the fray and, in effect, has ensured that it won't go under like some of its location-aware start-up brethren surely will.

"If all goes well, in the near future Plazes will be made available to millions of Nokia customers both online and on millions of mobile devices," the Plazes blog post read. It will still be available as a standalone service, and its iPhone application is still on track.