Yahoo-Nokia deal 'first step' in long-term strategy

Eden Zoller, Principal Analyst, Ovum

MELBOURNE, AUSTRALIA: According to Eden Zoller, Principal Analyst, Ovum, “The alliance between Yahoo! and Nokia is a sensible, tactical move but ultimately no game changer for either party. The deal is helpful in bolstering their respective offerings in communications, mapping and navigation but this in itself is not enough to allow them to gain the ground they have lost to sharper rivals like Google and Apple. The most constructive way of viewing the alliance is a first step in a longer term strategy.”

She added: “Under the deal, Nokia will provide Yahoo! with navigation and mapping capabilities, an area where Yahoo! has failed to make an impact but where Nokia has made good progress with Ovi Maps on the back of its 2007 acquisition of Navteq. Nokia will in turn make Yahoo! email and instant messaging default services on all Nokia handsets, including low end phones which dominate in emerging markets.

“The broad thrust of the alliance is to improve Nokia and Yahoo’s mobile Internet offerings. The agreement might have some impact in emerging markets, a key focus for both companies and where high-end smartphones are still in the hands of a few. However, we cannot see the deal making waves in Europe or North America, where Yahoo! in particular needs to play a much stronger hand.”