Nokia and Yahoo: A Quid Pro Quo, but Quo Vadis?

Nokia and Yahoo have formed an alliance which, according to this press release, has three principal components. First, Yahoo will be the exclusive provider of email and chat services for subscribers to Nokia’s wireless internet service, which will be branded Ovi Mail/Ovi Chat powered by Yahoo!. Second, Yahoo! will make Nokia (thanks to its acquisition of NavTeQ three years ago) the exclusive source of maps and driving directions, “powered by Ovi.” Finally, the two companies will support “federated ID” across the two properties, so that subscribers can use a single user name and password to log on to both companies wireless services.

Selected services will launch in the second half of 2010, with global roll-out of a broad range of services extending into 2011. Both companies say they are trying to expand their global presence. Nokia’s smartphones have underperformed in the North American market, while Yahoo!’s mapping capabilities have been largely under-supported on a global basis.

Single sign on across the two sets of services seems like a very modest objective for the two companies. Nokia has been very active in the world of wireless identity management – through initiatives with Liberty Alliance among others – for nearly ten years, since the early days of WAP (the Wireless Access Protocol). Yahoo! has long offered single-sign on to multiple services by employing its OpenID offering, including a hybrid implementation along with OAuth that enables users to be quickly and anonymously authenticated on multiple secure Web sites.

The initial offering is not impressive. Indeed, more than one analyst has characterized it as the effort of two former category leaders seeking to become relevant gain. Ovi Mail and Messaging had few users. Likewise, Yahoo! Maps has lost its battle against Google Maps (and, besides, it has long been “powered by NavTeQ”). As a matter of fact, the whole idea of granting “exclusives” is antithetical to the power of RC (Recombinant Communications) because it forecloses on the idea that members of the developer community might introduce an unexpected or much needed innovation. Single-sign on may make the user experience a bit more seamless, but the “exclusive” approach seems less likely to generate compelling content or services.