Looks like Microsoft Corp. (NASDAQ: MSFT) is teaming up with South Korean consumer electronics giant LG Electronics. Ole' Softie wants Windows Mobile to supplant Symbian and MacOS as the leading operating system for mobile devices.

We've heard this all before. Although Windows Mobile has a decent market share, Apple, Inc. (NASDAQ: AAPL) has taken the mobile world by storm with the iPhone, and Research In Motion Ltd. (NASDAQ: RIMM) keeps bringing out one cool Blackberry after another. Can Microsoft really fend off these two large competitors with a "strategic collaboration" with LG?

Microsoft hopes this partnership will be different, as LG has become a powerful force in the mobile market in the last three years. LG CEO Yong Nam used a standard corporate explanation in explaining the partnership, stating "This agreement between LG and Microsoft will create critical momentum in the industry . . . with this partnership, mobile computing will truly become an everyday reality, and LG and Microsoft will be at the forefront of it."

But Mr. Nam, I have news for you: mobile computing has already become a reality and Microsoft is not in the lead, nor is it creating new markets. It will take a paradigm shift for Microsoft to stand up to the competitive challenge sitting in front of it, not just an enhancement of the same technology that's been around for years. I'll believe the fruits of this partnership's labor when I see it.

South Korean consumer electronics behemoth LG Electronics Inc. saw an 84% rise in profit in its second quarter ended June 30. The electronics company reported a $694.8 million profit on strong sales of flat-panel televisions and wireless handsets. That figure was an 84% increase over the year-ago quarter.

In what seems like a copycat model of larger rival Samsung Electronics' success, LG is now making more and more flat-panel television sets for off-brand and private-label customers as well as selling some very svelte and design-focused 3G handsets used by wireless carriers worldwide.

The electronics company warned, however, about its third quarter results, downplaying it as attributable to a global economic downturn. According to reports, analysts speculated that the company's results have peaked this year as its business momentum would weaken in future quarters.

LG continued to make huge strides in the global wireless handset market, overtaking rival Sony Ericsson as the world's fourth-largest in the second quarter. Sony Ericsson, which had a disappointing quarter, is finding it harder to sell its mid- to high-end handsets, as sales of entry-level handsets continue to be the market for sell-in. Sony Ericsson's entry-level product portfolio is extremely weak. On the flip side, LG said that it plans to sell 100 million handsets this year alone, compared with just over 80 million in 2007.

MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
• The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
• The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.

OTHER PAPERS:

• According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.

WEB SITES:

• Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.

MAJOR PAPERS:

• The Wall Street Journal reported that probes by the U.S. Justice Department and the Securities and Exchange Commission center on whether American International Group Inc (NYSE: AIG), as well as its financial products division, which has been the source of controversy and profits, intentionally inflated the value of contracts linked to subprime mortgages.
• According to a person familiar with the matter, the Financial Times reported that South Korea's LG Electronics may consider a bid for General Electric Company's (NYSE: GE) appliance business.

OTHER PAPERS:

• Exxon Mobil Corporation (NYSE: XOM) will sell the remaining gas stations it owns to gasoline distributors, according to the Associated Press. However, the distributors will continue to pay to use the Exxon and Mobil brand names.
• Xinhua reported that MetLife Inc (NYSE: MET) is seeking permission from Chinese regulators to combine its two ventures in China. The insurer said it believes the move will allow it to compete more effectively in the Chinese market.

A funny thing happened on Motorola (NYSE: MOT)'s way to selling its handset business. No one offered to buy it [subscription required]. The logical candidates are firms like LG and Sony-Ericsson that are already in the business. Credit markets are probably keeping private equity interests away.

Etta Kidron, an analyst at Oppenheimer & Co, told The Wall Street Journal, "I think going public with its intentions hasn't made it easier to find a solution and has raised doubts about Motorola's commitment to the business."

The lack of buyers may leave Motorola management in the odd position of having to turn around an operation that it does not want. The company's market share in handsets has dropped from almost 22% worldwide to 12%. The market is taking Motorola's stock down further because it is concerned that fixing the unit could take years. This is, of course, if it can be fixed at all.

Motorola's shares, which traded around $16 in December, are just over $11 now. If management wants the stock to recover, it will have to go to Wall Street with a plan for fixing the handset operation. The plan may face long odds and may mean more quarters of losses, but investors would at least like to know that the largest part of Motorola is not adrift.

Douglas A. McIntyre is an editor at 247wallst.com.

Motorola Inc. (NYSE: MOT), which can't seem to make up its mind regarding its floundering wireless handset division, has given yet another sign that it may be considering some kind of equity move with it. The Illinois-based telecom company has hired private-equity executive Paul Liska as its new CFO. Liska will have responsibility for hoarding as much cash for the wireless giant as possible, but will also probably take a look under the hood in regards to what needs to be done about the company's wireless handset business so that it can be making consistent profits again.

Here's tip number one to Liska: all the financial moves in the world won't help a thing unless Motorola can make wireless products customers want -- and hopefully, desire. That's not happening right now. Korean rivals Samsung and LG Electronics are churning out sexy handset designs with multiple wireless carriers left and right. Motorola? Not so much. The Apple, Inc. (NASDAQ: AAPL) iPhone has put the hurt on Motorola just that much more.

So, where does that leave Liska? Even though Motorola CEO Greg Brown said that the company was committed to its handset division, that could be interpreted as this: "we are committed to looking at every option to ensure our handset division remains part of the company or is spun off into a separate entity that would shield Motorola shareholders from its dastardly performance." I'm not putting words into anyone's mouth here, but Brown's "committed" statement could mean several different things. It will be up to Liska to make a map of those things and drive the best decision into the boardroom for the company. Maybe he'll get chummy with longtime Motorola pundit Carl Icahn as well.

MAJOR PAPERS:

• Nokia Corporation (NYSE: NOK), Samsung Electronics and LG Electronics have said no to buying Motorola Inc's (NYSE: MOT) handset business, and potential Chinese interest is not there. The perception now, according to the Wall Street Journal's "Heard on the Street," is that Motorola's problems may be to difficult to fix.
• The Financial Times reported that the Los Angeles city attorney launched a wide-ranging legal action on Thursday against Health Net Inc (NYSE: HNT), one of California's biggest health insurance providers, accusing the company of defrauding customers by setting illegal policy cancellation targets for its sales agents.

OTHER PAPERS:

• According to sources, the Economic Times reported that Tata Motors Limited (NYSE: TTM) may be looking to spin off Jaguar into a separate entity once the acquisition of the brand from Ford Motor Company (NYSE: F) is complete.
• The U.S. government has approved the first virtual fence, built by The Boeing Company (NYSE: BA), along the U.S.-Mexico border in Arizona, the Associated Press reported. Along the 28 mile stretch of border, radar and surveillance cameras will be used to try to catch people entering the country illegally.