In its first quarter earnings report, Yahoo! Inc. (NASDAQ: YHOO) ticked off all the deals and buyouts it had made in the first quarter of the year. In the five weeks since then, the company has kept itself busy with even more deals.
There’s a deal in Egypt, and there’s the agreement to buy Associated Content Inc. and to grow the international side of that company’s business. Yahoo! is also blanketing the coming World Cup soccer championships with a variety of interactive content and special events around the world. CEO Carol Bartz has made the development of Yahoo!’s international presence a keystone of her tenure at the company’s helm.
That’s not a bad strategy for Yahoo!, given that the US market is growing more slowly than the international. The company has also made a couple of other international deals in the past two days.
First, the company has partnered with Nokia Corp. (NYSE:
NOK) to put Yahoo!’s email and chat services on Nokia’s Ovi platform and Nokia’s maps and navigation services on the Yahoo! platform. The deal is a good one for both companies, leveraging Nokia’s position as the largest mobile phone maker in the world to present the Yahoo! brand on all those phones. For Nokia, the deal gives its Ovi platform, which is so far a dud in North America, a position with one of the tech world’s strongest brands.
Second, Yahoo! has purchased an Indonesian social location service named Koprol. It’s not really clear what Yahoo! expects to gain from this purchase, other than more international awareness. The company’s senior vp for Asia said that integration of mobile devices and PCs is a major force in the industry now, and that this is “especially true in many emerging markets where we are introducing the Yahoo! brand to many new-to-Net users.”
Maybe. Indonesia, the world’s fourth most populous country is certainly a high-priority target after China, India, and the US have been divided up. Except for the US, all of the four largest countries have less than 50% of their populations on line.
Most of the recent Yahoo! deals look suspiciously like simple co-branding agreements. Such deals are often a substitute for substantive agreements that can be measured in return on investment. A CEO can always say that the benefit of such agreements are long-term and that investors shouldn’t judge the strength of such deals on short-term results.
Creating a footprint that’s a mile wide and an inch deep is inexpensive. Creating a footprint that seriously threatens competitors takes money and time and skill. It’s still a bit early to see which one is taking shape at Yahoo!.
