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What's in Nokia's (en)Pocket?

Nokia Corp. (NYSE: NOK)'s acquisition of mobile advertising specialist Enpocket shows that the Finnish handset maker is serious about being a contender in Internet services with heavyweights like Google (Nasdaq: GOOG) and Yahoo Inc. (Nasdaq: YHOO). But one analyst says the mobile handset maker is not yet at the level of those Internet giants. (See Nokia Acquires Enpocket.)

Nokia wants to be more than just a device maker and launched its own brand of Internet services called Ovi last month, some of which will be integrated into its high-end smartphones. The acquisition of Enpocket blends advertising into Nokia's services mix. (See Nokia Stakes Claim on Services.)

"Nokia is not in the same league as Yahoo and Google, but that's where it would like to go," says Ovum Ltd. principal analyst Eden Zoller. "Enpocket gives Nokia more credibility in the mobile advertising space."

Zoller explains that with Enpocket, Nokia gains a strong international operator customer base as well as big-name advertisers. Enpocket's customers include Vodafone Group plc (NYSE: VOD), Telefónica SA (NYSE: TEF), Sprint Corp. (NYSE: S), and Bharti Airtel Ltd. (Mumbai: BHARTIARTL). Its advertisers include Pepsi, Expedia, Samsung Corp. , and William Hill.

Enpocket's mobile advertising platform delivers ads over different formats including SMS, MMS, mobile Internet advertising, and video.

Nokia says it will continue Enpocket's business of providing the mobile advertising platform to operators. But the device maker also wants to incorporate ads into Ovi, which would augment that service's revenue possibilities. (See Nokia Stakes Claim on Services, Nokia, Vivendi Partner, Nokia Buys gate5.)

"If we're enabling operators to offer advertising, then our share [of advertising revenue] is smaller," says a Nokia spokesman. "But if we're offering ads in our own services, then our share would be higher."

The acquisition will add to two mobile advertising services that Nokia launched in March this year, which Zoller describes as "not a clear proposition." (See Nokia Manages Ads.)

Enpocket is the latest mobile advertising firm to be snapped up in a spate of acquisitions this year. (See Startups Chase Mobile Ads Biz.)

— Michelle Donegan, European Editor, Light Reading

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