After failing to win customers over with their first version of the Windows Phone 7 OS, Microsoft is set to have another crack at taking customers away from Apple and Google with CEO Steve Ballmer at the World Mobile Congress in Barcelona saying that a new version of the OS is being worked on.Overnight Ballmer unveiled new updates for Windows Phone 7, including integration with Twitter and the ability to run multiple applications simultaneously, a feature already present in many competing devices.

Microsoft’s plans also follow last week’s unveiling of a partnership between them and Nokia that would put Windows Phone 7 software on Nokia devices later this year. Both companies said they expect to benefit greatly from the partnership, giving Microsoft access to many more customers while injecting new life into Nokia’s smartphone business.

The Wall Street Journal said that Microsoft, which released its Windows Phone 7 software last year, is seen as a laggard in the market, missing key technologies and lacking interest among mobile-application developers, all key to success in the new and quickly growing market.

All of the announcements made by Ballmer appear to be “catch up” moves say analysts. Along with offering Twitter integration and multitasking, Microsoft said it plans to deliver a more advanced version of its Internet Explorer Web browser for Windows Phone 7, which the company said will surf the Web and run animations faster.

The company also demonstrated a Windows phone interacting with its Xbox 360 video-game console and Kinect motion controller, which sold briskly during last year’s holiday shopping season. The company said it plans even more features to integrate its phone software with its popular videogame products.