(Adds details, analyst, shares)
HELSINKI, Sept 30 Global mobile phone leader
Nokia NOK1V.HE said on Tuesday it signed a deal to buy
Canadian instant messaging provider OZ Communications in an
effort to improve its internet services offering.
Nokia did not disclose the value of the acquisition, but
said the privately-held company employed a staff of 220 and had
5.5 million monthly paid users.
"OZ's team and technology will help Nokia to address the
fast-growing consumer messaging market," said Niklas Savander,
head of Nokia's services and software unit, under which the new
company would fall.
This is the latest in a string of buys the Finnish company
has made to boost its consumer internet services business as
growth in the cellphone market looks set to stall.
In July, Nokia bought U.S. digital maps firm Navteq for $8.1
billion and it has snapped up ten smaller firms in the industry.
Pacific Crest Securities analyst James Faucette said the OZ
acquisition made sense in the context of Nokia's push to improve
access to Internet services -- a strategy it has dubbed Ovi.
"(Nokia) had previously been building things to focus on the
enterprise market, but the much larger opportunity and the focus
of Ovi is on the consumer market> I don't think we should be
surprised to see them adding capability to that platform,"
Nokia hopes to combine Internet services such as its gaming
offering N-Gage, navigation and digital music stores into one
The company's success has been built on easy-to-use phones,
but growth in this sector is becoming harder to achieve.
Earlier this month, Savander said that small companies
developing services Nokia itself plans to offer in the future
were likely acquisition targets, since such purchases would
speed offerings for the Finnish firm.
Nokia said it has been working with OZ since 2003 and sees
the purchase as a way to give customers fast and easy-to-use
access to leading instant messaging providers.
The deal is expected to close in the fourth quarter.
Shares in Nokia finished 1.98 percent higher at 12.90 euros
on Tuesday, after falling to a session low of 12.30 euros in
earlier trade. The stock is down about 50 percent since the
start of the year.
(Reporting by Agnieszka Flak in Helsinki and Sinead Carew in
New York; editing by John Stonestreet)