By Yukari Iwatani

CHICAGO (Reuters) - Microsoft Corp. MSFT.O is making its biggest foray yet into the wireless world.

The software giant and Verizon Wireless, the nation's No. 1 wireless telephone company, on Thursday said they signed an exclusive deal to develop and market jointly wireless data services such as content from the Microsoft Network, Windows- based wireless devices and business applications.

The deal would allow Microsoft and Verizon Wireless to extend their reach to corporations by offering jointly- developed wireless services and devices.

Consumers would get access through Verizon Wireless to Microsoft Network services, including Hotmail, the popular free Web-based e-mail service, and MSN Messenger instant messaging, as well as content such as calendar, news, stock information, sports and weather.

MSN has previously announced more limited wireless deals with Verizon, Sprint Corp. FON.N and others.

"It signifies that Microsoft is going to be what we all suspected: a bigger player in the wireless data space going forward," Knox Bricken, wireless analyst for Yankee Group said. Handset manufacturers and the carriers already worry about the dominance of Microsoft in the markets for enterprise servers and enterprise applications, she said.

Financial terms of the deal were not disclosed, but the two companies said they will launch on Friday a multimillion-dollar joint marketing and branding campaign for the MSN portion of the deal, including TV, newspaper and Internet ads.

"This will be the biggest advertising and marketing push by Verizon Wireless since the company was created," said Jeffrey Nelson, a spokesman for Verizon Wireless.

Starting Friday, consumers, who buy Verizon Wireless' Web-enabled cell telephones, will have access to MSN content through a co-branded portal called "VZW with MSN." Current Verizon Wireless customers with Web-enabled phones will be rolled over to the MSN content over the next several months.

Verizon Wireless' first Microsoft Windows-operated device, Thera by Audiovox Corp. VOXX.O , will be available in stores starting Thursday for $799.

Over the longer term, both sides plan to co-develop smart telephones, Pocket PCs and other mobile devices that run Windows, as well as wireless applications for corporations using the .NET Web services platform, they said.

Microsoft already has deals with Samsung Electronics 05930.KS , Mitsubishi and Sendo.

Jane Zweig, chief executive of wireless consulting firm the Shosteck Group, said the commitment by Verizon Wireless to market Windows-based mobile devices will give Microsoft the leverage to approach more device manufacturers about using its software.

More immediately, Verizon customers in the United States with Web-enabled cell telephones will be able to get Web access including MSN for a fee ranging from $6.95 to $12.95 per month, depending on how many alerts are sent to the subscriber's phone.

MSN content will be available to customers on Verizon Wireless' digital network, but Nelson said services for corporations will be designed to work on Express Network, its new network capable of high-speed Internet connections.

New Verizon Wireless customers, who already have Hotmail, can also request to have that e-mail set up as their primary e-mail for their phones.

While MSN will be a portal for Verizon Wireless, the company said other content from MSN competitors like Yahoo Inc. YHOO.O will remain available to its customers.

In the future, the two companies hope to bring to market advanced services such as location-based messaging, which allows merchants to send promotions to users as they walk past a store, for example.

The MSN Web site gets 270 million visitors each month and the MSN service has eight million subscribers, while about 46 million people use MSN Messenger and 110 million use Hotmail, Microsoft said.

-- Additional reporting by Elinor Abreu in San Francisco