In news headlines last week Microsoft announced they were licensing Adobe’s Flash Lite and Reader LE technology for their Windows Mobile platform.

With both Flash Lite and Reader LE running on Windows Mobile, users can run Flash content and view PDF files respectively, both of which are common staples of mobile browsing.

On a larger scale, the deal also means that Adobe will have its technology installed on billions of mobile devices and Microsoft will be offering better user experiences for its mobile users.

However, underneath the headlines, news sources are saying that the Adobe-Microsoft deal is a response to the iPhone market and Steve Jobs’ rejection of Adobe’s Flash Lite technology, claiming that it performed too slowly on the iPhone.

Despite the rejection, Adobe is still interested in developing a Flash player for iPhone. However, the company will need more of Apple’s co-operation or risk developing with the iPhone SDK on their own and clashing with Apple.

Already having developed a PDF advertising hybrid with Yahoo! Ads, Adobe has made moves in the past for popular user bases, technology and business models, ones which companies like its new friend, Microsoft, wants in on with a $44.6 billion dollar bid for Yahoo!

How badly does Adobe want a piece of the iPhone user base?

If Adobe is willing to tweak an entire format as part of gaining the advertising market base and pair up with an old rival for a stronger presence on mobile devices, it’ll be interesting to see what Adobe’s next strategy is to get its software on another popular user front.