Nokia should jump on Yahoo, says analyst

James Middleton

November 20, 2008

2 Min Read
Nokia should jump on Yahoo, says analyst

Web giant Yahoo is floating rudderless following the departure of co-founder and chief executive Jerry Yang. The company has had a tough time of it lately – failing to secure a takeover by Microsoft, and then the collapse of its advertising partnership with Google.

As a result, at least one industry watcher reckons Yahoo’s low valuation plus its brand and considerable consumer support, suggests that a different suitor should step forward: Nokia.

Microsoft’s February offer of $31 per share valued Yahoo at around $45bn, and with the company’s stock currently floundering at around a third of that, Yahoo could represent a good investment for another company looking to grow its web presence, according to Ovum analyst Tony Cripps.

Microsoft has been publicly disinterested in re-engaging in acquisition discussions, and Google would not appear to benefit from acquiring Yahoo itself, especially since the quashing of the advertising contract on competition grounds. AOL is also struggling, which leads us to Nokia.

It’s no secret that the Finnish handset vendor is intent on becoming a major web player, using Ovi as a launch platform. “There’s a clear imperative coming from Espoo for Nokia to become part of the fabric of the internet and not just to build on the foundations laid by others,” said Cripps.

The analyst believes that for starters, Nokia will make its Nokia Maps API available to third parties, and follow it up with plans to expose further Nokia services to web developers. The only caveat is that the true convergence of the web and mobile worlds depends on big bets, which may leave established web players liable to outpace Nokia by enveloping mobile and other domains as a natural part of their expansion. Cripps points out that Google already is doing this, while others like Microsoft are beginning to execute on this reality.

Yahoo’s strong brand in the US could play a vital part in Nokia’s development plans, and Cripps notes that the US company has a compelling, yet grounded, approach to extending its brand value and influence beyond the desktop, to mobile and consumer electronics, through initiatives such as Yahoo! Go, oneConnect, Blueprint and Widget Engine.

“All of which should make it an attractive acquisition target for Nokia; a bargain, if not actually cheap,” said Cripps.

About the Author(s)

James Middleton

James Middleton is managing editor of | Follow him @telecomsjames

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