Yahoo To Throw A Hail Mary To Nokia β€” But The Football Will Be Tied To A Brick

Earlier today, Yahoo sent out an email to the press notifying us about a special event on Monday with CEO Carol Bartz. The event happens to be in New York City which is interesting for two reasons. 1) Foursquare, the subject of many Yahoo aqusition rumors, is based in NY. 2) Most of TechCrunch will be in New York for our TechCrunch Disrupt conference. So what is Yahoo up to? AllThingsD found out this evening. It’s definitely not about Foursquare. It’s about Nokia.

According to Kara Swisher’s sources, Yahoo will be announcing a deal with Nokia that will build Yahoo email, search, and other applications into their devices. At first glance, this is a very big deal. Nokia, after all, is still by far the largest mobile phone maker in the world. Recent reports give Nokia a 37.4% share of the global market (in Q1 2010). That’s far ahead of number 2, Samsung, which has about 20%. Where’s the much-talked-about Apple on that list? Number six, with 3%.

So this is huge right? Well, maybe short-term. But long-term this is Yahoo betting on the past, rather than on the future.

Simply put: the future is smartphones. Nokia, while it may dominate the overall market, is a smaller player in smartphones. Instead, they dominate in feature phones — you know the phones that people still mainly use to do things like make phones calls and send text messages. For now, thanks to the evolving markets in third-world countries, this remains a strong segment. But there’s indications that this could change sooner than some expect.

At Google I/O today, a number of questions at the press event following the keynote asked about Android phone reach in various countries. GigaOm’s Om Malik asked Andy Rubin why Android wasn’t focusing on emerging markets such as India, where feature phones rule? Rubin’s response was that they made a firm decision to bet on smartphones.

Today’s smartphone is tomorrow’s feature phone,” Rubin said. He said that Moore’s Law dictates that all phones will evolve quickly, and within the next 12 months, smartphones will be the devices making waves in the developing world. He went further. He said that those with “legacy positions” (a thinly-veiled reference to companies like Nokia) see it differently, but that the tide will shift — with or without them.

This project between Yahoo and Nokia has apparently been called “Project Nike” — after the Greek goddess of victory. In terms of nicknames, it’s hard to think of one more presumptuous than that. Swisher also notes that at one point, Nokia and Yahoo were talking about a co-branded phone, but that’s apparently now off the table. That’s probably a good thing, as that wouldn’t have worked either and would have just cost both sides more money and time.

The point is, without a major shift in Nokia’s strategy, this is a short-term grab by Yahoo. It’s seems like a smart play for now, but in a year or two years, this may look like yet another failed idea. Mobile, at times, has been one of Yahoo’s few bright spots in the past several years. But again, a deal like this is not about the future, it’s about the present. Meanwhile, Yahoo’s rivals, are thinking the opposite way. It’s hard to come up with anything shown at Google I/O today that wasn’t about the future.

The future is what sells. It wins every time.

Information provided by CrunchBase


Leave a Reply

Your email address will not be published. Required fields are marked *