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Microsoft, Nextel in $600 million deal

Microsoft says it will take a stake in Nextel Communications and announces plans for a new wireless portal via its MSN network of Internet services.

Microsoft today said it will take a stake in Nextel Communications and announced plans for a new wireless portal via its MSN network of Internet services.

The software giant said in a statement that it will buy $600 million worth of Nextel's common stock under the wireless deal where Nextel will be Microsoft's first provider for its new wireless portal.

Microsoft said that through Nextel the two companies will offer a cobranded wireless portal for Nextel's 3.15 million customers. Through the new portal, Nextel customers will be able to access their email, address books, calendar, news, financial information, and other Web-based content from MSN via their Nextel phones, Microsoft said.

The wireless portal is designed to work with handheld devices, cellular phones, and interactive pagers via its MSN network of Web services, and users will be able to access their online information from wherever and whenever they want through the wireless MSN portal, the Redmond, Washington-based company said.

For example, Microsoft said that more than 40 million users of MSN Hotmail will shortly be able to access their email, use their online address books through their cell phones, and track news and weather.

In addition, the company said that in the near future its wireless portal services will include e-commerce offerings, which the user could take advantage of via their cell phone or handheld wireless PC.

"This is a significant step toward simplifying people's access to valuable online tools and information where and when it's most convenient to them," Microsoft consumer and commerce vice president Brad Chase said in a statement.

Today's announcement is not only one of several similar ventures launched by other portal companies but also the beginning of a new business for both Web firms and mobile communications, according to Wireless Internet & Mobile Computing analyst Alan Reiter.

Because these wireless portal ventures are up and coming, business models for the concept portals are still "undefined," Reiter said. He added that creating a model is "extremely difficult," and that portals are primarily geared toward the horizontal markets, while the most successful wireless data applications have been in the vertical markets.

Still, Reiter said that well-known companies such as Microsoft and Yahoo (in a wireless deal with Pagenet) can help boost the wireless portal concept. He also said that the future of wireless data is dependent on the willingness of Web-based companies to delve into the wireless market.

The wireless MSN portal will be accessible by devices using microbrowser technology, such as Pocket Internet Explorer for the Windows CE operating system and wireless Internet access. Microsoft said that on top of working with Nextel, it plans to build relationships with other leading wireless carriers to promote its new wireless strategy.

The wireless portal will be available later this year in conjunction with the next major upgrade of the MSN portal, Microsoft said.