Yahoo Targets Emerging Markets With Nokia And Koprol Deals

Don’t get fooled by the recent reports about Yahoo and Nokia joining hands on maps, mail and chat services. Yes, they are both ageing twentieth-century web and mobile brands and yes this deal seems to be intended to bridge the gap with rivals Google and Apple. However, if you read closely, there might very well be more to it than what the press in general wants to see. Believe me, the place where the companies are most likely to benefit from their partnership is in emerging markets. Read on.


The Agreement
The financial terms of the deal were not disclosed by the companies but the much touted “global strategic alliance,” will get Nokia to integrate Yahoo’s maps and navigation services with its own Ovi maps service, while Yahoo will provide Nokia’s mail and chat services. All exclusive. Maps and navigation services will be branded as “powered by Ovi”, while chat and mail will be “powered by Yahoo”.
Select, co-branded service offerings are expected to become available from the second half of 2010, with global availability expected in 2011, the companies said in a joint statement.

The Mature Market Side
So far, what has been widely covered and talked upon is the competitive advantage of Google + Apple vs Yahoo + Nokia. More to the point, there is also the expected growth of mobile ad spending through local search and mobile coupon offerings.
As ClickZ reported, “Borrell Associates predicts U.S. mobile ad spending is expected to grow dramatically in the next few years, from $2.7 billion in 2009 to $57 billion in 2014.”

In terms of branding, it seems the pact provides little shine – if none at all – to the two twentieth-century web companies. Wired spelled it out in its headline: Nokia and Yahoo Team Up on Mobile, But Few Care

Nokia logo.JPGWhat is more exciting is the impact of the deal on each company’s international presence. For Yahoo, Nokia will bring more exposure to foreign markets as the Finnish mobile phone manufacturer is number one outside the U.S.
For Nokia, signing up with Yahoo will give it an entry ticket into the U.S. market.

Update: 14:41 EST Carol Bartz gave her opinion in this video:

The Promise From Emerging Markets
Yet, the most interesting part of the announcement in my view is one short part of Yahoo Carol Bartz’s statement. Most have focused on the PR part where she said the alliance was “bringing personalized experiences to more people across the mobile web” — nothing spectacular there. However, that sentence ends as follows “…particularly in emerging markets where we are seeding the next generation of Yahoo users.”

There it is. Yahoo’s ambition is to penetrate emerging markets where mobile use is exploding and most people access the web via mobile phones only and Nokia being the number one brand, this is the icing on the cake.
Nokia’s CEO, Olli-Pekka Kallasvuo, noted that the agreement will allow to reach users “across almost every country around the world, many of whom will have their first Internet experience on their mobile.”

More Evidence ?
Thumbnail image for koprol yahoo.JPG
Hot on the heals of this deal, Yahoo has also announced it has acquired Koprol, the Indonesian equivalent of FourSquare, for an undisclosed sum. With this purchase, Yahoo will be able to leverage Koprol’s presence in Asia for its emerging market expansion purposes. According to Yahoo’s press release, Koprol has just introduced its BlackBerry app, meaning that the Silicon Valley search and content provider will be aggressively extending its reach in the region.

According to Koprol’s own words, the deal is “well suited for Indonesia and the emerging markets in general.”

Here’s a video of the Koprol founders speaking about their Yahoo deal:

There you have it.

Next Step, Next Stop: A Yahoo-Nokia Merger?
In their newsletter yesterday, research firm IDC went as far as predicting a potential merger of the two companies down the road. Their mobile consumer digital analyst, Scott Ellison, said the move could be a “test run,” suggesting that “logical conclusion is potentially a merger,” while also acknowledging challenge that would pose such cross-cultural integration.

I won’t bet on that merger part. How about you?

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