Motorola, Yahoo Team Up in Mobile Phone Pact

Yahoo has now signed up the two biggest handset manufacturers to load its Yahoo Go for Mobile services on their phones, after an announcement with Motorola on Thursday.

Motorola said it will prominently feature Yahoo Go for Mobile, which includes Yahoo Mail, search, address book and Yahoo Local, on handsets worldwide starting the first half of next year. Motorola did not specify which handsets would get the feature but said it would distribute tens of millions of phones featuring Yahoo Go for Mobile.

Earlier this year, Yahoo said Nokia would sell certain phones with Yahoo Go for Mobile in Europe, Asia and the United States.

In addition to deals with handset makers, content and search providers like Yahoo and Google have also announced partnerships with mobile operators. 3 Group said last month that some Yahoo services and applications would become available on certain handsets. T-Mobile International sets Google as the default home page on some Internet-capable phones. Sony Ericsson Mobile Communications and Motorola also have made similar announcements with Google.

The deals point to a tug of war over customers between handset makers and operators.

“There is a built-in conflict between handset manufacturers and operators,” said Adam Daum, an analyst at Gartner. “Both of them want to add value to their service and both want to own the customer.”

The operators have the upper hand over the phone makers because customers have an ongoing billing relationship with the operator and because customers turn to the operator for service issues, he said. Also, large operators are in a position to negotiate with handset makers if they want a certain application removed or added when purchasing large numbers of handsets.

The partnerships reflect the continuing interest from operators, handset makers and content providers in encouraging mobile data use. Operators have invested heavily in data-enabling their networks, but customer interest has been tepid. Handset makers hope that attractive data services might encourage customers to buy higher-end phones. Content developers see potential added revenue from mobile users.

-Nancy Gohring, IDG News Service (Dublin Bureau)

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