Nokia Opens The 'Ovi' On Mobile Ad Market, Acquires Enpocket, Plans New Ad-Supported Services

by Joe Mandese, Sep 18, 2007, 7:45 AM

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Nokia, the Finnish company that is best known as the world's leading supplier of cell phones and mobile communications handsets, Monday announced the acquisition of Enpocket, a U.S.-based company that has emerged as a leader in the burgeoning mobile advertising marketplace. The deal is part of a broader strategic plan to transform Nokia from a hardware manufacturer into a mobile Internet services provider, with advertising at the cornerstone of its plan. The deal also puts Nokia, a company with $40 billion in annual revenues and the fifth largest brand in the world, squarely into competition with companies like AOL, Microsoft and Yahoo in the nascent mobile advertising sector.

In the months preceding its deal to acquire Enpocket, Nokia has quietly been expanding its mobile Internet communications services, and had been expanding its own in-house advertising operations. The acquisition of Enpocket will accelerate that process. Upon completion of its acquisition of Enpocket next month, Enpocket will be merged with Nokia's own fledgling advertising services divisions - Nokia Ad Services (a commercial mobile advertising network) and Nokia Ad Service Connector (a contextual advertising service on mobile handsets) - into a new entity called the Nokia Ad Business, which will be headed by Enpocket President-CEO Mike Baker.

Nokia executives declined to specify the size of the new ad organization, but Enpocket currently has 120 employees worldwide and relationships with big mobile services providers like Sprint and big advertising brands. The advertising organizations also complement each other in geographic terms, says Baker, noting that Enpocket is a big player in the U.S., while Nokia dominates the overseas marketplace, especially in Asia and Europe.

"As an advertising guy what I love about this company is, 'Yeah, they make good hardware, but people really love the brand.' They have a relationship with 950 million consumers who comprise their handset base, and they have relationships with literally every mobile operator on earth," he notes.

While Nokia has lost its dominance of the U.S. handset marketplace, it maintains a 37% share of the world marketplace, and is so powerful in Asia that its brand ranks No. 1, outpacing Coca-Cola among all consumer brands.

Tom Henriksson, Nokia Director of Ad Service, says the company is in the process of a transformation that will remake it from a mainly hardware provider into a provider of mobile-based Internet communications services, and that advertising will be a primary source of revenues for those new offerings.

In recent months, Nokia has introduced a music download service, and has been providing an array of navigation and map services to mobile phone users. It also has the world's largest mobile portal service. All of these services and future planned ones fall under the banner of Ovi, the Finnish word for "door," which also has the connotation of a portal, and suggests Nokia is going after other big online players like AOL, Microsoft and Yahoo, all of which have also been expanding their mobile advertising services portfolios.

AOL recently acquired Third Screen Media, while Microsoft bought ScreenTonics, and Yahoo has been making noise on the mobile front as well.

Nokia already had been stepping up its advertising services portfolio, accelerating sales of its Nokia.Mobi mobile portal service over the past six months, and the timing of the merger with Enpocket seems ideal, creating a global, one-stop advertising services entity capable of introducing and monetizing services across a consumer base of nearly 1 billion handsets in most of the major markets worldwide.

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