Yahoo and Nokia are teaming up to boost their mobile internet offerings.
Starting in the second half of this year, Yahoo will host Nokia’s Ovi email on phones exclusively and Nokia in turn will provide maps and navigation for Yahoo.
At a news conference in New York, the companies highlighted the importance of expanding services for users in emerging markets, for whom the phone is increasingly the primary device for using the web.
One could always say the partnering of losers doesn’t make a winner
Nokia is the leading handset vendor in many emerging markets, but it has struggled to grow in North America. Nokia Chief Executive Olli-Pekka Kallasvuo said working more closely with Yahoo would help it compete in the US.
“Location, maps and navigation will get more mind-share, will get more attention in the US and many more users in the North American market,” said Kallasvuo. “This is one step we’re taking in making our position stronger in the US.”
Mobile services
The role of mobile services and software has become much more important since Apple and Google entered the phone market, forcing traditional handset vendors like Nokia and Samsung to hurry to build up their offerings.
Nokia has splashed more than $10 billion in just a few years to build a new business by offering internet services ranging from music downloads to email, but these have so far won few paying customers.
Similarly, Yahoo has far less market cachet than Google, whose Android mobile operating system is used by many smartphone vendors from Motorola to HTC.
“One could always say the partnering of losers doesn’t make a winner,” said Pierre Ferragu, analyst at Bernstein Research. “It is often true, but for Nokia, the right future that could lead to an interesting investment case is more about stabilising its existing position and being successful in the mobile platform game, riding on the back of Apple and Google coattails only.”
Neil Mawston, of the technology analysis firm Strategy Analytics, said that the deal might help both Yahoo and Nokia to deliver some of their mobile services more efficiently and save on costs.
The deal could also be a first step toward closer cooperation between the two companies in mobile advertising further down the line, Mawston said.
Yahoo CEO Carol Bartz said the company had not invested sufficiently in its maps offering and hoped the partnership with Nokia would help it leap forward. “Yahoo lost its focus on maps a couple of years ago,” she said.
Bartz said that while the Nokia deal was not an advertising partnership, the offer of improved location and navigation technology would help drive Yahoo’s bid to build local advertising and marketing services for consumers.
“The ability to do local performance advertising is really on our radar screen,” she said. “Having location combined with great local content is what our users are looking for.”
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