Yahoo-Nokia Alliance Is Too Late for Mobile Market

Yahoo and Nokia have unveiled a partnership that will see Yahoo power Nokia’s Ovi Mail and Ovi Chat platforms and Nokia provide mapping services for all of Yahoo’s navigation products. But the deal is a late effort by two companies being leap-frogged by newer, nimble competitors in the mobile space.

Or as my friend Michael Gartenberg, who tweeted just after the announcement, put it: “Yahoo and Nokia deal feels like two brands that have lost relevance seeking to reclaim it.” Indeed, this deal would have held far more promise had it been inked as little as two or three years ago. But at this point, swapping services won’t be enough to slow down the mobile juggernauts of Apple and Google, both of which already provide rich ecosystems and services.

Some numbers to help put this last-ditch alliance in scope:

  • Yahoo! Mail has over 600 million members worldwide
  • Nokia Ovi has over 9 million mail users
  • 100 billion messages sent monthly on Yahoo! Mail
  • 81 billion instant messages sent monthly through Yahoo! Instant Messenger

Yahoo, which hasn’t focused on its Maps platform for years — CEO Carol Bartz admitted as much during the webcast detailing the Nokia deal — gains the navigation expertise offered by Nokia both in Ovi Maps and in Nokia’s Navteq assets, which Nokia purchased in 2007 for $8 billion. And given Nokia’s focus on emerging markets, this alliance brings the Yahoo brand to new places around the world — locations poised for growth, so there could be some short-term, marginal benefit.

Ironically, Nokia’s Ovi brand will gain recognition as well, but not in emerging markets. Instead, Nokia’s Ovi name will be seen in the United States each and every time someone uses Yahoo Maps, which will be tagged: “Powered by Ovi.” Although Nokia is the undisputed worldwide champion when it comes to handsets, it wants a foothold in the U.S. to offset lost market share. Nokia President and CEO Olli-Pekka Kallasvuo called the deal a step toward helping the company “compete in the world’s largest market.” It is a step, but not much of one and not one that the company should have waited until 2010 to take.

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