The project is a Linux-based operating system code-named Meltemi, the Greek word for dry summer winds that blow across the Aegean Sea from the north. It is being led by Mary McDowell, the handset maker’s executive vice president in charge of mobile phones, these people say.

A spokesman for Nokia, Doug Dawson, declined to comment on the Finland-based company’s future products or technologies.

Nokia’s attempt to build its own software is another sign that the value in the technology industry is shifting from hardware to software. In the past year, Google Inc.’s Android software has dominated the midrange smartphone market while Apple Inc.’s iPhone, which runs Apple’s iOS software, has captured the high end.

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There’s no question it’s a jarring contrast–layoffs versus champagne and cookies.

But that’s the reality at AOL as its acquisition of the Huffington Post closes this week, even as it sheds employees as part of its ongoing turnaround effort.

Sources said the New York-based Internet portal could announce layoffs as early as today.

[UPDATE: Layoffs will not come until after the Huffington Post deal is closed said other sources, although they are coming.]

AOL CEO Tim Armstrong indicated job cuts were definitely coming at a paidContent conference in New York yesterday.

“There will be job changes,” he said, when asked about layoffs.

Perhaps sooner than later.

BoomTown received several emails from worried AOL employees, noting that human resources staffers were taking steps to initiate the layoffs at 10 am ET/7 am PT this morning and that there would also be employee meetings then too.

I followed up with several sources close to the situation, who confirmed that the layoffs are imminent. Nonetheless, they could not specify the timing, size and scope of them.

[UPDATE: There will be an all-hands meeting for AOL staff with Armstrong, as well as new content head Arianna Huffington.]

The last time AOL laid off employees a year ago, it was a large action with job cuts of 2,300.

The latest slashing comes just as AOL management will try to aggressively tout the closing of its $315 million purchase of the Huffington Post.

The integration of the well-known news and opinion site will mean a significant change for AOL’s editorial efforts, as well as an opportunity to impress advertisers.

Thus, AOL is prepping boxes with Greek cookies and pricey champagne to send out to key advertising clients, to celebrate the deal’s close.

Why Greek cookies? Because it’s the original country of Huffington, co-founder and editor-in-chief of the Huffington Post.

I have emails into AOL for a comment.

As BoomTown reported last week, Yahoo planned to announce a partnership deal with Nokia this morning, centering on email and mapping.

At the announcement, the companies said Nokia will be the exclusive global provider of Yahoo’s maps and navigation services, integrating Ovi Maps across Yahoo properties and branded as “powered by Ovi.” And Yahoo will become the exclusive global provider of Nokia’s Ovi Mail and Ovi Chat services branded as “Ovi Mail/Ovi Chat powered by Yahoo.”

This morning at 7 am PT, I liveblogged the event, which took place in New York, with Yahoo (YHOO) Carol Bartz and Olli-Pekka Kallasvuo, CEO of the Finland-based handset maker.

As you will see, it was over in a flash.

Last week, Yahoo sent out an invite for the press conference, which read:

“Please join Yahoo! CEO Carol Bartz for an exciting announcement about providing global consumers with rich online and mobile experiences, and bringing forward a new era in keeping consumers connected.”

Nokia (NOK) is the largest manufacturer of mobile devices in the world, although it has lost ground in the key new arena to innovative smartphones, which are being pushed by Google (GOOG) via its Android operating system and in recent years, by Apple (AAPL) with its iPhone.

Here we go:

7:02 am PT: Nokia reminded everyone to “keep our cellphones on.” Get it? Ha. Ha. Ha.

It was Bartz of Yahoo and Nokia’s Kallasvuo on the line. It sounded–I was on the horn from California–a bit tinny, actually.

Just as I wrote, they unveiled a partnership related to Yahoo email going on Nokia devices, but also including Nokia maps on Yahoo.

Yahoo’s map offerings have been weak for a long time now, as Google and Microsoft (MSFT) mapping efforts have grown strong.

Both Bartz and Kallasvuo said very little about anything, except how great it all is.

I would include quotes, but they were really dull!

7:11 am PT: It then opened for questions, but it seemed BoomTown was somehow cut off!

Oh well, foiled again–which is to say, not at all, since we already scooped this deal last week.

Thus, some background:

The partnership–code-named “Project Nike” after the Greek goddess of victory and not the athletic footwear giant–has been under consideration for many years between the companies without result.

Yahoo has had a range of various mobile initiatives and has had many, mostly failed, partnerships with carriers and telecom makers.

But without its own phone or mobile operating system, the Internet giant is essentially nowhere in what has become the most important digital sector today.

Nokia, which makes more mobile devices than any other company, has also struggled to keep up the lightning-fast pace of innovation and has been looking for ways to compete as the landscape shifts dramatically.

Thus, the Nokia deal is likely to be a splashy centerpiece of Wednesday’s investor day by Yahoo in Silicon Valley, which will feature Bartz and her senior management.

Here is the entire press release:

Nokia and Yahoo! to Bring Integrated Web Services to Millions of Consumers around the World

Global Strategic Alliance Enables Industry Leaders to Leverage Strengths in E-mail, Instant Messaging, Maps and Navigation across PC and Mobile Devices

NEW YORK, May 24, 2010 (BUSINESS WIRE)–Today, Yahoo! (NASDAQ:YHOO) and Nokia (NYSE:NOK), announced a worldwide strategic alliance to extend the reach of their industry leading online services and offer people rich experiences that keep them connected to their world and the world around them.

Building on more than five years of collaboration, Nokia and Yahoo! will leverage each others’ strengths in e-mail, instant messaging and maps and navigation services, to provide consumers with access to world-class experiences on both PC and mobile devices.

As part of the alliance:

* Nokia will be the exclusive, global provider of Yahoo!’s maps and navigation services, integrating Ovi Maps across Yahoo! properties, branded as “powered by Ovi.”

* Yahoo! will become the exclusive, global provider of Nokia’s Ovi Mail and Ovi Chat services branded as “Ovi Mail / Ovi Chat powered by Yahoo!”

* Nokia and Yahoo! plan to work on ID federation between their services, beginning by making it easy for people to use their Ovi user IDs across select Yahoo! properties to easily access the online content and services they need.

“Delivering great user experiences–both online and on your mobile–is what this alliance is all about,” said Olli-Pekka Kallasvuo, CEO, Nokia. “We’re enabling millions of Yahoo! customers in key markets including North America to discover the unique capabilities that Ovi Maps brings. Similarly, Yahoo!’s online expertise will bring exciting mail and messaging enhancements to millions of Ovi Mail customers across almost every country around the world, many of whom will have their first Internet experience on their mobile.”

“What a combination,” said Carol Bartz, CEO, Yahoo!. “We’re excited to expand the reach of our best-in-class Mail and Messenger services, bringing personalized experiences to more people across the mobile Web, particularly in emerging markets where we are seeding the next generation of Yahoo! users. At the same time, we believe Nokia’s strength and continued investment in maps and navigation will greatly enhance our existing products, enabling us to focus on areas that are core to our business.”

Together, Yahoo! and Nokia will continue to deliver compelling Internet experiences that address the core needs of consumers, developers, operators and advertisers. The companies will utilize their respective global distribution advantages and brand recognition across consumer audiences.

Select, co-branded service offerings are expected to become available from the second half of 2010, with global availability expected in 2011.

Today, Yahoo sent out an invite for a press conference in New York on Monday with a mysterioso tone:

It read, vaguely:

“Please join Yahoo! CEO Carol Bartz for an exciting announcement about providing global consumers with rich online and mobile experiences, and bringing forward a new era in keeping consumers connected.”

That’s all it took to get BoomTown on the horn to find out what that meant.

And, according to sources, that will be a deal with Finland-based mobile phone giant Nokia (NOK) to build Yahoo (YHOO) email, search and other applications and services into a range of its devices.

While the pair had once discussed Nokia making a Yahoo-centric phone, sources said that is unlikely to be part of this deal.

Such a partnership–code-named “Project Nike” after the Greek goddess of victory and not the sneaker–has been batted around for many years between the companies without result, even as Google (GOOG) and Apple (AAPL) have grabbed the spotlight and business in the exploding smartphone market.

Yahoo has had a range of various mobile initiatives and has had many, mostly failed, partnerships with carriers and telecom makers.

But without its own phone or mobile operating system, such as Google’s Android, the Internet giant is essentially nowhere in what has become the most important digital sector today.

Nokia, which makes more mobile devices–mostly “feature” phones, not smartphones–than any other company, has also struggled to keep up the lightning-fast pace of innovation and has been looking for ways to compete as the landscape shifts dramatically.

That’s why the long-festering deal was placed again on the fast track, especially by Bartz, who has put a lot of emphasis of late on showing Yahoo to be more relevant and cutting-edge.

Thus, the Nokia deal is likely to be a splashy centerpiece of next week’s investor day on Wednesday in Silicon Valley, which will feature Bartz and her senior management, including Americas EVP Hilary Schneider.

Schneider has played a lead role in the Nokia deal, which sources said closed two to three weeks ago.

Bartz will also be appearing at the TechCrunch Disrupt conference in New York next week, a speaker addition that will be announced soon, where she is likely to discuss the deal.

Yahoo has been on a bit of a deal tear of late, purchasing social publishing start-up Associated Content for $90 million earlier this week.

And while the Nokia deal will likely garner a lot of attention when announced, execution will–as usual–be key in determining if this works, especially since both companies are now in a much weaker position.

“Recently, Nokia has offered devices that people don’t want and Yahoo has launched mobile services that they don’t want,” said one person familiar with the talks. “Perhaps in working together, they will find a way to finally create some value.”

Yahoo declined to comment and Nokia has not responded to an email I sent tonight.

Before the recent crash-and-burn of the overall U.S. economy, BoomTown went all Cassandra and started talking about the worrisome weak tech stocks at the beginning of September.

Then in mid-September, after listening to the frothy statements at two demo conferences from a series of start-ups, I got even grumpier in a post called “Dear Web 2.0: It’s Still the Economy, Stupid!”

In Greek mythology, Cassandra was given the gift of prophecy, except–due to her rejection of Apollo’s affections–nobody would ever believe her warnings.

Well, this time you might want to believe it–for Silicon Valley, it really is the economy now.

Today, as with the rest of Wall Street, tech stocks started tumbling severely on analyst reports and general worries about the economy and consumer spending.

Apple (AAPL) shares slid almost 15 percent after two analysts downgraded their ratings on the company, with one citing the “worsening consumer spending environment.”

No kidding!

And more: Google (GOOG), for the first time in two years, fell below $400 a share, before bouncing back up a bit. Yahoo (YHOO) dipped back below $18 a share. Microsoft (MSFT) had the sunniest results, just off 2 percent, to just below $27 a share.

Sources within all those companies tell me that cost-cutting has now moved to Job No. 1.

Google is going to be throttling back on its hiring boom, for example, while Yahoo’s top execs have been handed cost-slashing instructions that one exec described to me as “bone-cutting.” The same is true at every big tech company.

As I have written previously, this will have a deep impact on smaller Web 2.0 companies.

As I wrote several weeks ago:

Instead, most will likely fizzle away quietly, with no exits in sight as the economy weakens and puts a vise grip on companies that cannot survive the very tough financial road ahead.

That means the popular Web 2.0 maxim of ‘growth before profits’ is in for a very bumpy ride.”

In other words, hold on very tight.