More evidence today that weakened behemoths Nokia and Yahoo! are in trouble. The two companies have "officially confirmed" that they are in "global strategic alliance" and are presenting the union as a strength whereas, in reality, it is a tacit admission that their brands are on the slide and that both companies are being hammered by, and are losing ground to, fleeter-of-foot competitors with more relevant products and services that are more popular with consumers, as Martyn Warwick reports.
Only last month Nokia once more issued a profits warning as it struggles to come up with a set of smart phone products that will enable it effectively to compete with the iPhone and the Blackberry.
Nokia's beleaguered CEO, Olli-Pekka Kallasvuo, who must be aware that his job is on the line if he doesn't do something spectacular to rescue Nokia's fading fortunes very, very soon, announced the alliance at a press conference held at 10h00 yesterday at the Nasdaq in Times Square, New York City. He claimed "This [alliance] is two powerful consumer brands working together to bring even better services to potentially billions of people around the world." (note the "potentially")
Analysts are by no means sure that this is a game-changer for either party. Michael Gartenberg of Altimeter Group encapsulated the general reaction when he commented, "These two companies, that have both lost a lot of relevance in their relative spaces, are both looking to reclaim that. There doesn't seem to be a whole lot here to indicate how they're going to do it. The centre of gravity has shifted to Google, Apple, Research in Motion and Microsoft. I'm not sure how combining these things together helps them gain ground on those competitors."
The Stock Market too was sceptical and unimpressed. The price of Yahoo! and Nokia shares showed minimal improvement after the announcement.
So, the upshot of all the hoo-hah and bad language (of which more later) is that Nokia is to be "the exclusive, global provider of Yahoo!'s maps and navigation services, integrating Ovi Maps across Yahoo! properties, branded as 'powered by Ovi'; and Yahoo! will become the exclusive, global provider of Nokia's Ovi Mail and Ovi Chat services branded as 'Ovi Mail/Ovi Chat powered by Yahoo!'. In other words, it's a co-branding exercise.
Yup, that'll do it.
While Olli-Pekka Kallasvuo's announcement was less than overwhelming, at leat it was gentlemanly and polite. However, his partner in the alliance, Yahoo's CEO Carol Bartz, distinguished herself by losing her temper with journalists and swearing at them during a press conference.
Those of you of a nervous disposition might want to skip the next paragraph as I quote the chief executive's expansive vocabulary. Criticised by the press and analysts alike for the leisurely way in which she is perceived to be dealing with Yahoo's problems, Ms. Bartz spat the dummy and told Michael Arrington, the editor of the influential industry blog TechCrunch, "I don't want to hear any crap about something magical that the fine people of Yahoo are supposed to do in this short time, so fuck off." What a charmer.
Having got off to a cracking start, Bartz continued in the same salty vein, "I've been at this company 16 month and I'm supposed to have come up with an iPod, an iPad and an iBlah."
Well, you haven't, have you Carol? Furthermore, Yahoo! is an also-ran in comparison to Google and looks like staying that way. Yahoo! stock are far, far below the US$33 a share that was offered by Microsoft last year in a buy-out proposal. That was turned down flat and Google's shareholders and board must now be repenting that rather ill-advised and rash decision.
Oh, and bye-the-bye, Nokia's press conference took place at 15h00 UK-time yesterday and we journalists were alerted to the fact via an email alert to join the webcast. Unfortunately, the invitation, from the PR firm Bell Pottinger (to whom Nokia no doubt pays a healthy monthly retainer), was despatched at 14:58 and 28 seconds and received by yours truly at 15h18. Very useful.
With a PR agency like that on you side....
I'll leave you to fill in the rest but I can guess what Carol Bartz might say.
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