The Yahoo-Nokia Deal: Some Details & Perspective

Yahoo and Nokia made their anticipated partnership announcement this morning in New York. The public elements of the deal include the following:

• Nokia will be the exclusive, global provider of Yahoo!’s maps and navigation services, integrating Ovi Maps across Yahoo! properties, branded as “powered by Ovi.”
• Yahoo! will become the exclusive, global provider of Nokia’s Ovi Mail and Ovi Chat services branded as “Ovi Mail / Ovi Chat powered by Yahoo!”
• Nokia and Yahoo! plan to work on ID federation between their services, beginning by making it easy for people to use their Ovi user IDs across select Yahoo! properties to easily access  the online content and services they need.

What does Yahoo get?

It gets reach for mail and messenger into emerging markets where Nokia is very strong. That represents additional potential reach for advertisers.

What does Nokia get?

Nokia gets additional distribution and reach for its Ovi Maps product.

What about search?

Search is not part of the deal. I just spoke with Yahoo and Nokia representatives and I tried to determine why. They didn’t provide anything concrete and kept re-routing me (so to speak) to the major deal terms. I’m speculating that the Yahoo-Microsoft implementation timeline was a deterrent here.

The Yahoo-Nokia products will roll out in the second half and over 2011. I suppose that search could be reconsidered or potentially implemented later, after the full Yahoo-Microsoft integration is complete, but they wouldn’t say anything on that point.

What about ads?

No official remarks on ads, although I did get this statement about it earlier this morning from a Yahoo PR person:

Search is not part of the initial agreement announced today. The two companies will work on future collaborations.  The companies plan to monetize the services in the future.

We can infer from this and what I heard on the phone that advertising is contemplated and the details will be worked out later. Nokia’s Navteq has launched a local ad network and the Yahoo Maps reach is a major potential distribution point for those advertisers.

In addition, any mobile apps that include maps or navigation that Yahoo develops using Ovi Maps would equally provide distribution for location-based advertising hypothetically — for both Yahoo and Nokia.

There is a search angle here. The Nokia executive I spoke with reminded me that location-based content (e.g., POIs) coming from Navteq into Yahoo Maps can also be indexed and presented in general and local search results.

Some are dismissing this deal as “too little too late.” I don’t agree.

For Nokia, this isn’t going to help the company’s competitive hardware position. But this will potentially improve Yahoo Maps and could open the door to Yahoo-branded mobile navigation or other map-based offerings. I think then that Yahoo stands to gain. This could potentially revitalize Yahoo Local to some degree, as well as enabling new LBS Yahoo apps for the mobile market.