• by Mark Walsh  @markfwal, January 18, 2008

Yahoo is teaming up with T-Mobile to serve targeted display advertising on the wireless carrier's Internet service in Britain. The first ads for T-Mobile's Web 'n' walk mobile browser will be rolled out during the first half of 2008.

Yahoo previously struck a similar deal with Vodafone last year, giving it a key role in display advertising on two of Britain's top mobile services. The move also reflects Yahoo's broader strategy of making advertising and distribution deals with carriers and handset makers in key markets including Europe, Asia and Latin America.

"We are focused on extending our leadership in both display advertising and in mobile services, and this new partnership demonstrates our continued momentum," said a Yahoo spokesperson.

At least one analyst called the deal a healthy sign for the mobile industry in Europe. "This is another proof of how buoyant the mobile advertising market is," wrote Thomas Husson, a JupiterResearch mobile analyst, in a blog post on the firm's Web site. He noted that Web 'n' walk had 2.8 million customers as of the end of September 2007.

In a report last month, Jupiter projected that mobile ad revenue in Europe will grow from just under $85 million in 2007 to $1.9 billion by 2012. In five years, mobile will account for 9% of European online ad spending.

In his blog post, Husson also pointed out that "of marketers having used or planning to use mobile marketing, 64% planned to use banner advertising on mobile portals, and 68% planned to use banner ads on off-portal mobile Internet pages during the next 12 months," according to a recent Jupiter executive survey.

But Yahoo appears to be losing out when it comes to mobile search. Both T-Mobile and Vodafone have selected Google as their mobile search engine. T-Mobile is also a key member of the wireless coalition Google formed late last year to develop its "Android" open mobile platform.