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Nokia And Facebook Working On Mobile Deal; Could Involve Investment

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image[by David Kaplan and Rafat Ali] Nokia (NYSE: NOK) and Facebook are working on porting the social network on to Nokia handsets in a major way, we have learned. The Facebook placement could be as prominent as the YouTube button on the main screen of iPhone, our sources indicate. Also, the deal involves giving Facebook a major slot within Nokia retail products’ displays.

But another factor elevates this beyond just-another-social-net-on-a-phone deal: Our sources have indicated that the discussions have involved Nokia purchasing a stake in the company, but these are in very early stages. This makes sense in light of Facebook’s recent strategic funding by Sawmer Brothers, in an effort to expand in Europe. The Nokia-Facebook deal would give the social network instant big-time mobile distribution: Nokia is the world’s largest maker of mobile phones. More after the jump…

A senior Nokia executive, speaking on background, declined to go into details about the pact with Facebook: “There is talk of a partnership in the works… it’s safe to say we’re testing the waters and things still have to be worked out.” E-mails and phone calls seeking comment on the deal from Nokia and Facebook representatives were not returned.

Nokia has of late been working on a slew of services for the mobile, including its mobile web service Ovi, its mobile social network Mosh (which hasn’t really rocked the world since its launch last year), and its recent spate of acquisitions in the larger media applications space. In October last year, it bought digital mapping provider Navteq for $8.1 billion to eventually offer customers location-based services. Also in October, it announced a deal to provide a year

14 Responses to “Nokia And Facebook Working On Mobile Deal; Could Involve Investment”

  1. When the hell are they going to release this Facebook app already? I've had my E71 since last August (2008) and I can't understand what the effn delay is!

  2. For thoses out there who don't want to wait, you can install a 3rd party Facebook application on your phone now. MobileFacebook is the first Facebook mobile application for phone. Works on nokia, motorola and samsung + others.

    The functionality is still primitive but you can view your friends, events, update your status and send notifications.

  3. Daisy, it could be bigger for Facebook because FB's core market is still college students, and Blackberries are more of a corporate handset. Nokia's big in US college campuses, but probably not as big as Motorola and SonyEricsson though.

    If Nokia has a stake in Facebook then there is considerably more incentive to give them better placement on the handset deck than FB currently enjoys on Blackberry.

    But Nokia's other agenda may be to use FB to promote the use of new apps that are only compatible with their newest, high-end handsets. That could be bad for FB because that would be a smaller still slice of the US college market.

    All speculation, of course. Let's see if a deal eventuates and if so, what they disclose about the terms.

  4. Owning content and channel through which the content is delivered seems to be a winning combination. however the strategy is not complete without total / partial participation from service providers. Nokia should also look to own a stake with some or most of the prominent service providers. It could be mutual benefit deals.
    Apart from business perspecitive
    1. Delivering a rich user expereince with device R&D;is also a challenge which Nokia can't escape with above strategy
    2. There is no point buying many companies with similar or over lapping business products. Nokia should only look to make friends(or eliminate) prominent leaders in those service areas with its strong position in Handset market
    -Srikanth Bogadapati