May 24, 2010

Nokia And Yahoo Is Cooking Something Exciting!

“Please join Yahoo! CEO Carol Bartz for an exciting announcement about providing global consumers with rich online and mobile experiences, and bringing forward a new era in keeping consumers connected,” the invitation reads.

The event is expected to discuss a partnership between Yahoo and Finnish phone-maker Nokia, in which new certain Nokia devices would ship with built-in Yahoo functionality, such as e-mail, search and various applications.

While the two may not spring to mind as the most natural of partners, each stands to gain from such a partnership — and each could use a boost.

“Nokia and Yahoo, each in their own market, is kind of suffering,” analyst Roger Kay, with Endpoint Technologies. “What you’ve got is Yahoo, [far from its former glory,] being whooped by Google, and while Nokia still leads the handset market, it has a portion of its former phone sales.”

Nokia commanded 34 percent of the global mobile handset market during the first quarter of 2010, but has been criticized for its lack of competitive products in the smartphone space — a space currently dominated by Apple, Research In Motion and Google’s Android OS. Of late, Nokia has worked to turn the situation around with the introduction of devices such as the N8.

In a search for greater robustness, does it make sense to partner with a company in the same position?

“If they teamed with a strong member they’d be the junior partner,” Kay explained. “So in this case they maintain their identities. I think it makes good sense. Nokia gains some functionality on their phones that’s interesting, and I guess what Yahoo gets is more eyeballs and distribution. I don’t know if [Yahoo] would additionally get paid.”

Still, when pressed, Kay hesitated to say the partnership was likely to be a good thing for each side.

“It’s probably not a bad thing,” he offered. “There’s very little risk to trying it. In the end, it makes sense.”


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