Yahoo and Nokia have announced to provide mail and chat services for Nokia customers around the world.

Yahoo and Nokia have announced an alliance that will have the phone providing map services to Yahoo customers on both personal computers as well as mobile devices, while the Sunnyvale Internet company provides mail and chat services for Nokia customers around the world.

The deal, announced Monday in New York by Yahoo CEO Carol Bartz and Nokia CEO Olli-Pekka Kallasvuo, would seek to leverage the strengths of both companies to compensate for the weaknesses of each. Nokia, which is the world's leading mobile-phone manufacturer, would gain access to Yahoo's world-leading base of e-mail subscribers, boosting Nokia's presence in the U.S., where the Finnish company is struggling to compete with fast-growing smartphone platforms such as Apple's iPhone and Google's Android.



"We are clearly the leader in our industry, yet we do not lead in the biggest market in the world — the U.S.," Kallasvuo told reporters in New York. "This is one step we are taking to change that."

Yahoo, meanwhile, would benefit by accessing Nokia's Navteq map services, which the Finnish cell phone company paid $8.1 billion to acquire in 2007. Bartz acknowledged that developing map services, which are crucial to attracting smartphone users, has not been a focus for Yahoo in recent years.

"By using Nokia's map and Navteq services, it will be a much richer experience for our users," Bartz said. She said the alliance would help Yahoo build its audience in developing countries such as Indonesia,
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India and Thailand where the primary way many people access the Internet is through their phones.

Given the competitive pressure that both Nokia and Yahoo face from Apple and Google, analysts cheered the alliance — but cautioned that given the rapid pace of change in smartphone technology, the new partners will need to move quickly if they are to gain traction in the fast-changing mobile market.

Yahoo and Nokia "are two companies that clearly need each other," said Scott Ellison, who analyzes the mobile consumer digital marketplace for the research firm IDC.

He suggested in an industry newsletter Monday that the alliance could be a "test run" for an even more involved alliance whose "logical conclusion is potentially a merger," but, he said, the alliance might not be easy to execute well, given the cultural difference between a European handset manufacturer and a Silicon Valley digital media and advertising company.

Ellison said he thinks Nokia and Yahoo have about a year to show progress. "It's a very positive step for both companies," he said, "but it's one where they're going to need to go further quickly."

Nokia and Research In Motion remain the world's leading mobile-phone manufacturers. Nearly 60 percent of smartphones sold around the world in the last quarter of 2009 carried their brands, according to market research firm iSuppli.

But figures compiled by the Gartner research firm show the share of phones sold with Nokia's Symbian operating system is decreasing, while Apple's iPhone OS and Google's Android are both increasing their share of the market. Google said last week that activations of Android smartphones now top 100,000 a day, up from about 30,000 at the end of 2009.

Under the deal, Nokia will be the exclusive provider of maps and navigation services to Yahoo customers around the world, under the brand, "powered by Ovi," Nokia's Internet service brand. Yahoo, meanwhile will become the exclusive provider of e-mail and chat services for Nokia customers, which will be branded as "Ovi Mail" or "Ovi Chat powered by Yahoo."

Financial terms of the deal were not released. The companies also said they would work to provide an integrated log on system for each other's online services. Some selected services are expected to become available in the second half of this year, with global availability