At the Nokia World event in Amsterdam Tuesday, Yahoo announced that some of its services, including instant messaging and email, would be embedded in Nokia's widely used Series 40 phone platform. There are two levels to this announcement: first, obviously the Yahoo services will enjoy tremendous exposure to the world's mobile users. Second, and perhaps more interesting, is that it could set both Yahoo and Nokia up for some conflict with mobile operators. Instant messaging is inevitably headed to the mobile device, both as a standalone service and eventually as an one that's integrated with existing mobile messaging systems, particularly SMS. However, SMS is such a cash cow for many operators, that they're moving quite slowly to offer users IM for fears it will cannibalize their existing messaging revenues. Some operators, such as 3 in Europe, offer free instant messaging to their users -- an offer that could be quite compelling for heavy texters who can also recruit their friends to join the same network so they can shift their messaging from paid SMS to free IM. Obviously the Yahoo services will still require customers to pay for data traffic, but history says that may not be enough to satisfy operators, who are obsessed with controlling the services their customers access, and limiting access to those services with which they have some sort of commercial deal. This is shortsighted -- they'd be better off making sure their customers have access to whatever services they want, and then figuring out how they can add value by improving usability, adding mobile features or integrating them with existing services. It wouldn't be surprising to see some operators have the software removed from Nokia devices they sell, particularly when Yahoo has shown in the past it's happy to strike carrier-specific deals to offer its services.
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