Yahoo, Motorola deal highlights struggle for portal power

Yahoo has agreed a deal with Motorola to pre-install its Yahoo Go mobile services on mid- and high-end handsets, including email, search and address book capabilities. The portal already has a similar deal with Nokia and has been actively building its distribution through partnerships with operators and manufacturers.

Yahoo’s mobile business is led by Christian Lindholm, a mobile industry veteran credited with many user interface innovations during his former role at Nokia, including the Navikey.

Earlier this year Yahoo released Go for Nokia Series 60, combining a wide range of advanced mobile services, including integration with Yahoo’s Flickr online photo album.

Motorola has also been active in this area before, signing a deal with Google to include a direct link to search services in January.

At the time I published an article entitled ‘Portal Power‘ which examines this subject in more detail. It’s worth revisiting some of its conclusions.

The article states: “There is a unifying theme to all of this activity: availability. The portal companies are currently focused on increasing distribution (e.g. Google’s deal with Motorola, Yahoo’s agreements with Cingular and Nokia) and making their services as accessible as possible (e.g. AOL’s acquisition of Wildseed’s mobile OS platform).

“This is a logical and necessary step, but availability is only half the equation.

“Deals between two ‘hot’ companies like Motorola and Google are always going to attract press excitement. However, the deeper question of understanding the changing dynamics of customer behaviour in the mobile environment is yet to be addressed.

“Mobile changes the rules for companies like Google and Yahoo. In the mobile environment, a text search is often insufficient to fully understand their ‘mission’. The portals can no longer rely on some of the factors which are taken for granted with PC-based customers. Basic assumptions suddenly need to be questioned: what kind of navigation buttons does the mobile handset have? How big is the screen? What happens if the battery dies in the middle of an interaction? For companies like Google, which has traditionally relied on the integrity of its user experience as a key selling point, these simple problems are big issues.

“There is also a strategic question here relating to the understanding of users’ missions. On the web, Google, Yahoo et al are in an extremely strong position because they have the best understanding of users’ missions by virtue of the terms input to their search engine. In mobile, network operators have access to an additional set of data which define the users’ mission even more precisely – location, billing and historical activity. Operators are better placed to understand user needs.

“It would be logical to assume, therefore, operators are in a better position to capture the value in mobile content discovery and, eventually, mobile advertising? Not necessarily.

“Portals like Yahoo and Google have other strategic assets which can be leveraged. Their free email accounts are the most obvious. Google’s recently launched mobile mail service is far and away the most usable I have seen. It has the potential to be a huge driver for Google in the mobile business. Both the operators and the portals are very much aware that access to personal email is one of the most compelling reasons for consumer adoption of mobile data services.

“Instant messaging is another. So too is mapping – check out Google’s excellent Java-based mobile mapping client for an example.

“Email and messaging are services where existing loyalties are very hard to break. Companies which own the relationship with the consumer in the desktop environment have a very good chance of extending that relationship to the mobile.”

Read the full version of ‘Portal Power’ here.

See this Reuters article for more on yesterday’s Yahoo and Motorola deal.

Also, look out for our forthcoming interview with Bill Schwebel, who leads AOL’s mobile business as Senior Vice President of Wireless. Due for publication in this newsletter on Friday, 11th August.

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