As Yahoo is donning the thinking cap to captivate new markets that internet giant Google has not already captured, it announced a strategic alliance with mobile industry giant Nokia called Project ‘Nike’. According to the deal, Yahoo will be the default provider for the search, mail and chat services of Nokia. On the other hand, Nokia’s Ovi will power Yahoo’s mobile and desktop apps.
Nokia has not much experience when it comes to email and chat, hence with this deal Nokia hopes to increase its reach manifold. Yahoo had lost out on the race with Google with regard to maps. But mapping has been Nokia’s strongest assets since the acquisition of Navteq, an electronic map company in 2007.
Yahoo is trying hard to spread its presence in emerging markets where the internet penetration is not very high but the mobile penetration more than makes up for it. A pristine example is India and China, one of the world’s biggest markets. They hope to have major brand recognition as most people in these markets access the internet through their mobile phones. When people get access to advanced devices, speedier connections and internet penetration rises, Yahoo wishes to be on the fore-front. Another step in this regard is that Yahoo is on its way to acquire an Indonesian social networking website that works on a wide range of mobile phones. Yahoo regards this as seeding the next generation of Yahoo users.
Nokia, which has already made a huge impact in markets like India and China, but lags in markets like USA, wishes to take on Apple’s iphones and Google’s android based smart phones. Nokia has not met much success in its smart phone segment, but hopes the deal will change that.
This alliance doesn’t seem like it will have a lot of impact on the already established western markets. Though it seems like a desperate attempt by two brands losing value in main markets, emerging markets may well be benefitted a lot by this. The financials of the deal are not known. Who will benefit more? Nokia or Yahoo? Yahoo seems to be getting a better deal out of it, but time will tell…
Author – Rohit Bhat