CORRECTED - UPDATE 1-Microsoft mobile boss to join Vodafone

(Corrects final paragraph to show 10 percent not 1 percent) (Adds Vodafone confirmation, changes dateline)

LONDON, Feb 14 (Reuters) - Vodafone (VOD.L) has launched an Internet Services unit and appointed Microsoft veteran Pieter Knook as its director to further develop the group's mobile Internet strategy, it said on Thursday.

The unit will focus on the provision of distinctive consumer Web services such as mobile Internet access and content through mobile devices.

Knook will join Vodafone on March 10 after 17 years with Microsoft (MSFT.O), where he spent the last five years as senior vice president running its mobile business.

The Wall Street Journal on Thursday said Microsoft planned to name Andrew Lees, currently a corporate vice president at the company's server and tools group, to lead its mobile-communications business. No one at the company was immediately available to comment.

Microsoft has gained little traction with its mobile strategy since launching its Windows Mobile operating system seven years ago.

It expects 20 million Windows Mobile-based smartphones to be sold this fiscal year to end-June. A smartphone is a phone with computer-like capabilities such as email and Internet browsing.

According to market research firm Gartner, 123 million smartphones were sold in 2007, just over 10 percent of the 1.1 billion mobile phones that were sold in total worldwide. (Reporting by Kate Holton and Georgina Prodhan; Editing by Quentin Bryar)