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Openwave to buy phone software maker

The wireless software maker is buying SignalSoft in a deal valued around $59 million. Shares of SignalSoft jump substantially on news of the deal.

Wireless software maker Openwave Systems, whose browser is inside nearly every Web-enabled cell phone, said Wednesday that it is buying a company that makes software to identify a phone's location.

The Redwood City, Calif., company said it intends to pay $2.26 per share to buy SignalSoft in a deal valued around $59 million, according to a statement. Both companies expect the deal to close in the third quarter, the statement said.

Representatives for both Openwave and Boulder, Colo.-based SignalSoft couldn't be reached for comment Wednesday. At the close of regular Nasdaq trading Wednesday, SignalSoft shares were up $1.16, or nearly 110 percent, to $2.22. Openwave shares closed down 25 cents, or nearly 4 percent, to $6.14.

Openwave said it would add SignalSoft's software into its products and then market the goods to wireless carriers worldwide. Wireless carriers use SignalSoft products to meet a federal mandate to ensure that police are able to locate a cell phone that had 911 dialed on it.

Carriers are also exploring ways of using the equipment to offer new services such as "find a friend," in which cell phone users would pay a monthly fee to be able to know the location of a friend or colleague.

Ovum, a market analyst and consultancy, reported in February that it expects 385 million people to be using these services by 2006, generating nearly $11 billion in revenue for the carriers.