Yahoo gangs up with Nokia for web services

One in the eye for Google on Monday as the world’s biggest handset vendor struck a global deal with Yahoo to collaborate on the delivery of email, instant messaging and maps and navigation services in the mobile space.

Under the partnership Nokia will be the exclusive provider of Yahoo!’s maps and navigation services, integrating Ovi Maps across Yahoo properties, which will now be branded as “powered by Ovi.” Yahoo meanwhile, will become the exclusive provider of Nokia’s Ovi Mail and Ovi Chat services, which will be branded as “Ovi Mail / Ovi Chat powered by Yahoo!”

The two firms will also work on ID federation between their services, with the aim of making it easy for people to use their Ovi user IDs across select Yahoo properties. Co-branded service offerings are expected to become available from the second half of 2010, with global availability expected in 2011.

Carol Bartz, CEO of Yahoo, said the deal would help expand the reach of its services, particularly in emerging markets, where the firm is building its next generation of Yahoo users.

According to Guillermo Escofet, principal analyst at Informa Telecoms & Media, the strategic alliance sees the two companies playing catch up with Google on the search and mapping fronts.

“The Finnish handset giant was forced to make Ovi Maps free in January to remain competitive with Google’s free mapping service on phones, but whilst Google has a well-oiled machine to make money from users searching for local services on Google Maps, Ovi Maps is far more geared at how to get users from A to B than at linking them to nearby services that have paid money to be discovered. The Yahoo Local service should help to fill that gap,” Escofet said.

“The partnership makes sense. But it is going to be very difficult to erode the lead that Google already has,” he said.