Nokia Takes Another Crack at IM With OZ Buy

Nokia, the world’s largest mobile phone maker, has agreed to buy Montreal-based OZ Communications for an undisclosed amount of money in a move that will allow the Finnish handset maker to offer consumer IM technologies on its phones. Nokia’s internal IM efforts don’t even merit an “F” and this purchase pretty much proves it. OZ has about 5.5 million monthly paid users, and partnerships with carriers and many other handset makers.

As we’ve already noted, OZ has been through many incarnations.

…began as a 3D graphics company in Iceland in 1991, where OZ CEO Skuli Mogensen was studying at a university. The company says it managed to license its 3D technology to Microsoft, and later moved into Internet and telecom real-time messaging before the telecom bust of 2001. Then when times were tough Mogensen says he and ten executives did a buyout and recapitalization and in 2004 found its VantagePoint funding.

OZ has raised over $70 million in funding from VantagePoint Venture Partners, Wellington Financial, Quebec Solidarity Fund, Deutsche Bank and others. It must be a good payout for these guys. For Nokia, however, I see this as yet another muddled move by the company, which is moving like a boxer after a long and brutal fight.

I think that Nokia just doesn’t get software and, to a large extent, the mobile Internet. They think they do, but they don’t. So every time they try to make a push into the space, they try and they fail. In 2005, for example, Nokia bought Intellisync for around $450 million to take on RIM and Microsoft. It was their big “business messaging” push. Then last week, they shut down the “business messaging” group. Three years of getting nowhere! What will happen to OZ’s messaging platform? While it’s hard to say for sure, Nokia’s past should be all we need to know.

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