As Mobile Deals Pile Up, Yahoo! Finds Relief

Stocks:  (YHOO)(GOOG)(MSFT)(TWX)

With new research showing that Yahoo! has a lead in many key mobile device applications, the company is not resting to help its competitors like Google, AOL, and Microsoft catch up. After cutting a deal to put its e-mail and messaging software onto a number of Nokia phones, Yahoo! has announced a joint venture with Europe cell service provider Vodafone.

Under the terms of the agreement, Vodafone will target ads to specific customers based on their behavior. Yahoo!’s technology will be used for helping identify characteristics like gender, demography and geographic location.

Yahoo! needs to demonstrate that it can come up with a new avenue for rapid revenue growth. Over the last two years, Yahoo!’s stock is off nearly 30% while Google’s has risen well over 150%.

Yahoo!’s CEO, Terry Semel, recently said that the growth potential for internet advertising is grossly underestimated. For his own sake, he should hope that his company’s wireless initiatives prove that statement right.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.