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Monday, March 08, 2010, 12:45 pm PT (03:45 pm ET)

Steve Ballmer praises Apple for creation of iPhone App Store

Microsoft chief Steve Ballmer recently had positive words about Apple's success with the iPhone and its App Store, adding fuel to rumors of a potential alignment between Apple and Microsoft to bring Bing search to the iPhone.

"Apple's done a very nice job that allows people to monetize and commercialize their intellectual property," Ballmer reportedly said last week in a speech at the University of Washington's computer science building.

Brier Dudley, columnist for The Seattle Times, took Ballmer's comments to mean that relations between Microsoft and Apple are warming, perhaps in advance of an announcement that Bing will become the default search engine for the iPhone. Rumors of such a deal between the two technology giants have persisted since January.

Dudley said it's possible that Apple and Microsoft could align to take on what both feel is a bigger threat: Google. The columnist personally asked Ballmer whether that was the case, but the Microsoft CEO just smiled and said he couldn't answer that question.

"Apple is coming off a tough divorce from its young search partner, which is now selling its own touch-screen smartphone and has floated concept designs of an iPad-like tablet device," Dudley wrote. "So perhaps it's natural Apple is reaching out to an estranged friend from the early days."

Ballmer's complimentary nature is a stark change from 2007, when the Microsoft executive famously laughed at the then-unreleased iPhone from Apple. By last year, Microsoft's own Windows Mobile had become stagnant while the iPhone has seen tremendous growth.

Rumors and speculation about Apple's alleged negotiations with Microsoft for Bing search come as many have perceived a growing rivalry between Apple and Google. Last summer, Google CEO Eric Schmidt resigned from the Apple Board of Directors as an investigation from the U.S. Federal Trade Commission was looking into the connections between the two companies.

Schmidt's move was seen as necessary as Google and Apple now compete in numerous markets in the technology sector: Google's Android mobile operating system competes with Apple's iPhone; both companies recently made large mobile advertising related purchases; Google's forthcoming Chrome OS will see the company enter the desktop computing space; and the Chrome browser competes with Apple's Safari.

The most public dispute between Apple and Google came last summer, when the Google Voice application was not accepted into the iPhone App Store. The two companies shared barbs with Google alleging the software was outright rejected for use on the iPhone, while Apple said it remained under review and consideration.

Microsoft also hopes to fight its way back in the phone market later this year when it plans to release Windows Phone 7 Series, a new multi-touch capable mobile operating system designed to compete with modern smartphones like the iPhone and handsets powered by Google's Android mobile operating system. Devices that run Windows Phone 7 Series will feature a dedicated button for Bing search.