Yahoo! Buys Stake in Sonera zed

Yahoo is expanding its presence in Europe’s massive wireless market, through an equity and marketing agreement with Finnish mobile technology firm Sonera zed, a unit of Helsinki-based Sonera Corp. .

Through the arrangement, Sunnyvale, Calif.-based Yahoo will acquire a 15 percent stake in zed, which distributes wireless news and information, as well as paid services like ringtones and picture messages, to mobile users in Finland, Germany, Italy, the U.K., the Philippines, and Malaysia. Yahoo also receives two-year rights to buy out the unit entirely, or to sell off its stake.

Yahoo also will receive seats on zed’s Board of Directors. Other financial details of the transaction were not disclosed.

In return for the stake, Yahoo gains access to zed’s wireless services, which it offers through partnerships with a number of regional mobile carriers. As a result, the Web portal will work with the smaller firm to roll out co-branded logos, ringtones, picture messages, chat and news. Yahoo also plans to use zed’s technology to deliver its instant messenger and email services to wireless users in Europe.

Yahoo said it will promote the services through its European network of sites, beginning with the U.K., Germany and Italy.

The portal already offers a number of similar mobile features — pay-per-downloaded ringtones, for instance — via partnerships with wireless carriers in Europe, but it said it would add to its services through Tuesday’s deal.

The move marks another step in Yahoo’s efforts to beef up its business — hard hit by the weak online ad maket — by introducing fee-based services. In the case with zed, Yahoo aims to take a cut from the firm’s wireless messaging products. zed said about 3 million users pay each month for roughly 30 million messages, icons or ringtones per month — a market that Yahoo is aiming to tap and grow. Sonera said second-quarter revenue from zed topped 11 million euros.

“We have identified the mobile space as a potential key driver of growth for our international operations,” said Yahoo Chairman and Chief Executive Terry Semel. “We believe that we will be well-positioned to provide services to consumers that they desire, while also creating a consumer pay platform in Europe.”

Added Mark Opzoomer, managing director of Yahoo Europe, “We believe that there are tremendous growth opportunities in consumer pay mobile value added services in Europe, and our objective, working co-operatively with key mobile operators, is to become a significant player in this area.”

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