November 5, 2001 3:55 PM PST

Microsoft cuts financial cord to wireless firm

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Microsoft has sold its stake in wireless software maker Wireless Knowledge, which the software giant and Qualcomm created together in 1998.

Wireless Knowledge, which bought the shares from Microsoft, will become a subsidiary of Qualcomm, both companies announced Monday. Financial terms of the deal were not disclosed, nor was the size of Microsoft's stake in Wireless Knowledge.

Southern California-based Wireless Knowledge is one of many wireless software makers selling ways to access corporate e-mail accounts or computer systems from wireless devices. The company markets its products under the name "WorkStyle."

Microsoft decided to sell its stake after the introduction of its Mobile Information Server in the spring. The wireless offering uses Wireless Knowledge's software to let mobile users access Windows Office and Exchange programs from mobile devices, said Microsoft Vice President Bob Muglia.

Microsoft believed it was "now best to pursue our respective goals using independent technologies," Muglia said in a statement, although the company said it would continue working with Wireless Knowledge on a "collaborative" basis on new projects.

Eric Schultz, CEO of Wireless Knowledge, said his company should have more success working with companies such as Palm and IBM now that Microsoft doesn't hold such a "deep" financial stake.

"Given the level of Microsoft investment, a lot of companies would likely shy away from working at the ultimate, deep level," he said.

Already, the company plans to expand its current partnership with IBM, and next week it plans to announce a relationship with Handspring, Schultz said.

Since its inception, Wireless Knowledge has signed pacts with various American wireless carriers, including Sprint PCS and Verizon Wireless. The agreements allow the carriers to sell access to Microsoft Exchange and Lotus Notes e-mail using wireless devices. The feature is available to Sprint and Verizon customers for $4 a month.

The company also inked an agreement in January with wireless e-mail provider OmniSky that allows OmniSky customers to access Microsoft Exchange or Lotus Notes e-mail systems. The agreement was supposed to help OmniSky reach more business customers.


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