Nokia and Yahoo have struck a wide-ranging alliance that covers email and mapping services across the PC and mobile.
Under the deal, Nokia will provide mapping and navigation for Yahoo, while Yahoo will provide email and instant messaging for Nokia’s Ovi-branded service.
The two companies will work on “ID federation,” allowing Ovi users to access Yahoo content and services.
The new offerings will be co-branded, with the first becoming available in the second half of 2010.
For Nokia, the deal will deliver some badly-needed content and scale to its internet offerings and will help it penetrate North America, its weakest market.
It allows Yahoo to leverage Nokia’s strength in mapping - thanks to its $8.1 billion acquisition of Navteq – as well as its dominance in handsets.
The two companies both bring a lot of market heft – Yahoo has 600 million users, Nokia has 35% market share and 9 million Ovi users – but both are trailing in key areas of their businesses, prompting some critics to describe the deal as too little, too late.
Nokia is still the world’s biggest handset maker thanks to heavy sales in emerging markets, but Apple, Android and RIM are taking the lead in smartphones, and Nokia’s global market share slipped 1.2 points in Q1, according to Gartner.
Yahoo and partner Microsoft run a poor second in search and while Yahoo CEO Carol Bartz said the company was “neck and neck” with Google in providing web services, she acknowledged it was behind in mapping and navigation, WSJ reported.
The biggest prospect for the alliance is in developing markets. Nokia CEO Olli-Pekka Kallasvuo noted that it would bring mail and content to customers “around the world, many of whom will have their first internet experience on their mobile."
Separately, Yahoo has also contracted out its Yahoo Personals website to Match.com, AP reports.
Nokia’s NYSE stock was down 5 cents Monday. In after-hours trading it fell another 4 cents to 10.02 , while Yahoo shares were off 9c to 15.54.