Nokia buys new talent

CEO Kallasvuo hoarding weapons for battle in Internet world

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By Anni Lassila
     
      Nearly six billion euros worth of maps!
      What is Nokia buying next - the Facebook community?
      On Monday last week Nokia made the largest transaction in Finnish economic history. It bought Navteq, which produces digital maps, for 5.7 million euros. The move is quite different from what we have grown accustomed to seeing at Nokia.
      During the time of President and CEO Jorma Ollila, Nokia certainly did not spread into the map business. Everything that superfluous was pruned away, and the focus was on the manufacture of mobile phones.
      Olli-Pekka Kallasvuo, who took over from Ollila last year, is closing new deals almost every month for software houses, and he signs cooperation agreements with players in the Internet and media game.
      However, the change in the manner of doing things is not because of the new management. Ollila is still the Chairman of the Board. Nokia's working environment has changed rapidly, and the company is trying to respond to the change.
     
Google and Yahoo had already taken over the market for basic Internet services and advertising when Kallasvuo took over as CEO of Nokia. Second-wave Internet services - various communities, and content created by the users - were rising fast.
      At the same time, sales of mobile telephones capable of fast Internet connections have increased sharply.
      This year 120 million smart phones will be sold. Many mobile phones already have WLAN connections and satellite navigators.
      The borders of the media, the Internet, and wireless communications have begun to blur.
      Ollila chose Kallasvuo to guide Nokia in this new world, where giants of the Internet and computer worlds are challenging the company, in addition to the traditional competitors.
      At the beginning of next year Internet services will be elevated alongside telephones as a Nokia business group equal to mobile telephones.
      With its new portal, Nokia plans to sell positioning services and music, and to pass on content of other Internet-based operators.
     
According to Kallasvuo, Nokia needs to be humble in the new world and to take an open attitude toward success stories invented elsewhere. The company cannot invent, develop, or have knowledge of everything. The new attitude has been reflected in the recent buying frenzy.
      So far, Nokia has managed to make good use of its acquisitions. Nokia built a positioning service on the basis of the Gate5 navigation software company, the purchase of Loudeye, which produces Internet music stores, was followed by the announcement of a new music store a year and a half later.
      Nokia will have to digest the purchase the size of Navteq for a while, but the acquisitions are unlikely to end here.
     
Helsingin Sanomat / First published in print 7.10.2007

More on this subject:
 Leading position in mobile phone technology was enough for Ollila

Previously in HS International Edition:
  Nokia to buy Navteq in Finland´s largest-ever corporate acquisition (2.10.2007)

ANNI LASSILA / Helsingin Sanomat
anni.lassila@hs.fi