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The shifting alliances around the mobile Internet sometimes resemble the manoeuvrings of the European powers in the run-up to the Great War. Right now, much of the diplomacy seems to be focused on containing Google. (For the purposes of this analogy, you can cast Google or Apple as Germany or Britain, according to your sympathies).

One way to keep the Google and Apple empires in check is by creating a counterweight through an alliance of two or more of the weaker powers. Last week, Yahoo and Nokia (which could play France, Italy, Russia, Turkey or the Austrian-Hungarian Empire) duly upgraded their long-running Entente cordiale into something quite concrete – Nokia will co-brand and co-market Yahoo’s email and messaging services, while Yahoo will do the same with Nokia’s mapping and navigation services. 

As Google and Apple invade the mobile Internet, it seems the traditional mobile industry is increasingly looking to Yahoo to mount a counter-offensive. Nokia’s closest rival Samsung is also working closely with Yahoo, as are some mobile operators – Yahoo now provides the mobile Internet search and sponsored search advertising services for Telefónica’s emocion portal, for example.

My enemy’s enemy

From the mobile operators’ perspective, Yahoo’s latest deal with Nokia might appear to muddy the diplomatic waters. It wasn’t that long ago that the operators were nervous about Nokia’s ambitions in the mobile Internet space.

But it is probably time to put these old animosities to one side. One way for mobile operators to stop Google, Apple or even Facebook, another ascendant power (the USA?), from colonising their home turf, is to bolster the Nokia-Yahoo alliance further still. Although Nokia (mobile handsets) and Yahoo (Internet advertising) are strong players in their respective markets, they are both on the retreat and, even together, don’t look to be a match for Google, Apple or Facebook in the new mobile Internet land grab.

Yahoo is strongest in the US, but even there it is going to struggle to compete with Google, Facebook and Apple in the nascent mobile advertising market. It is unlikely the alliance with Nokia, a second-tier player in the US handset market, will be enough to hold off the great powers. Will AT&T ride to the rescue?

While Yahoo is strongest in the email, instant messaging and online display advertising markets, social-networking and search, enhanced by location data, look like they are going to be the key strategic battlegrounds on the mobile Internet. Nokia’s control over a large segment of the handset market, combined with its mapping software and services, will certainly strengthen Yahoo in the mobile Internet space, but probably not enough to keep pace with the market leaders.

In December 2009 in the UK, for example, the sites of Facebook, Google and the top three mobile operators all attracted far more mobile Internet visitors than Yahoo and Nokia’s sites, according to the GSMA’s Mobile Media Metrics.

What’s more, Google’s Android smartphone operating system has far more momentum with app developers right now than Nokia’s rival Symbian software. The functionality of Android is evolving rapidly as Google pumps out new versions, while the older Symbian is having to undergo a fundamental overhaul to try and catch up.

Android’s success has Google oozing confidence. “We’re just learning how to master that type of engineering – that type of iterative engineering and all of the innovation, I mean it’s game on,” Andy Rubin, Google’s Android lead, recently told Gizmodo. “There is going to be stuff that’s just going to blow your mind in six months.”

But Android isn’t necessarily the weapon that will win the war. Android’s openness means it can be used as a launch-pad for Internet services from Google’s rivals – Samsung, for example, plans to tweak Android so that Yahoo is the default search engine.

Although Samsung and some mobile operators will probably be uneasy about Yahoo’s deeper alliance with habitual empire-builder Nokia, that probably won’t stop them continuing to arm Google’s long-time adversary. With widespread support from within the traditional mobile industry, Yahoo may just hold its own on the mobile Internet and keep the great powers in check.

The mobile Internet’s Great Game is not yet over.

 

David Pringle

This article was first published on the GSMA’s Mobile Innovation Exchange. David moderates discussion forums on the site and is a freelance media and investor relations consultant.

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members