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Microsoft, McCaw executives start wireless investment firm

Brad Silverberg, a former Microsoft executive who led the development of Windows 95, will be chief executive of the new company, called Ignition.

A group of former high-level executives from Microsoft and wireless telecommunications firm McCaw Cellular have teamed up to create an investment firm that will target start-ups in the increasingly hot market for wireless Internet services.

The new holding company, Ignition, is backed with a $140 million initial investment from communications equipment maker Qualcomm, Softbank and the Madrona Venture Group, an investment firm. The company is also well stocked with executives who were instrumental in driving the developments of Internet software as well as the wireless sector.

Former Microsoft senior vice president Brad Silverberg, responsible for the software giant's Internet comeback and the development of Windows 95, will be Ignition's chairman and chief executive. Other former Microsoft executives now at Ignition include Jon Anderson, John Ludwig, Cameron Myhrvold, Satoshi Nakajima, Chris Peters, Jonathan Roberts and Rich Tong. Former McCaw executives include Steve Hooper and Kathy Iskra from Nextlink, a company controlled by McCaw.

Microsoft experienced a string of high-profile executive defections or extended leaves last year. As previously reported, Silverberg took an extended leave from Microsoft before returning as a consultant and finally leaving the software maker last fall. Myhrvold retired from the company while his brother Nathan took a sabbatical.

Ignition, based in Bellevue, Wash., hopes to make wireless Internet use a daily commonplace by attracting, investing in and guiding wireless technology firms worldwide. The move comes as wireless firms begin to grab the attention of investors, sending stocks in many wireless companies spiraling. The sector has not gone unnoticed by Microsoft, which in December cut a deal with Swedish telecom firm Ericsson to develop products that provide fast access to the Internet over wireless devices.

According to a Yankee Group study, users of digital wireless phones will grow from 220 million in 1998 to roughly one billion over the next four years. Also, wireless Internet access accounts will grow from 150 million in 1998 to more than half a billion in the same time frame. Internet-enabled "smart phones" are expected to have 48 million users worldwide by 2002 and 204 million by 2005, the research firm reported.

Anticipating that explosion in wireless services, cellular phone and handheld device makers, software firms, and e-commerce and Internet access players are redoubling their efforts to bring Net services and content to handheld and wireless devices. Motorola predicts that more than half of all Internet connections will come from wireless devices by 2003.

Already, several online brokerages, including Ameritrade, DLJdirect and TD Waterhouse, have plans to offer wireless trading. Amazon and Barnesandnoble.com also announced plans last year to allow shopping on cellular or palm devices.