• SHARE

Last week, AOL and DoCoMo announced a major strategic alliance, but few techno-journos were blindsided by the news. Rumors had been floating since early summer, and the potential benefits were fairly easy to digest. Savvy scribes had probably already put together rough drafts. It was just a matter of plugging the requisite quotes from company executives and industry insiders.

Cyberia logo

Don’t sit back and yawn just yet, however. This could get interesting.

For those who missed the front-page headlines, it was announced that NTT DoCoMo would buy a 42.3 percent stake in AOL Japan and that the companies would align their fixed and mobile platforms. In subsequent announcements, DoCoMo said that it would eventually list AOL Japan and promote AOL as its preferred ISP.

I suppose a simple real-world equivalent would be if Yamato Transport teamed up with McDonald’s for home delivery. McDonald’s has infrastructure and reach, but it needs Yamato’s mobility to go further. And likewise if Yamato wanted to take its black cat trucks outside Japan, McDonald’s could take them there.

In the past, I’ve looked on the bright side of AOL and DoCoMo’s i-mode, particularly because they’ve done a good job of getting the mainstream online. AOL/DoCoMo users don’t have to “take the plunge”; they just make a few clicks, they’re there. Both companies have also done an admirable job of spawning lively communities of users, and because of their relatively secure environments, both were pioneers of e-commerce and m(obile)-commerce.

Before we discuss the merits and demerits of this alliance, let me point out an important distinction; DoCoMo bought a stake in AOL Japan. That is, it’s a member of the family, but it’s one enormous extended family. While AOL in the U.S. has been a tremendous success, its overseas subsidiaries haven’t done quite as well. Lacking innovative content and industry-shaking tieups, AOL Japan hasn’t really made waves and its subscriber base — 440,000 — is dwarfed by the 3 million-plus populations of @Nifty and Biglobe.

Still, the potential merits do sound very good . . . on paper, at least. AOL Japan’s content might not be so unique, but in the long run it’s another feather in the i-mode hat, which in turn can attract more content, more users.

Beyond this, a key point in the alliance is the proposed integration of AOL’s Instant Message service with i-mode. Many Net observers call IM a killer app (I’m not one of them) and have applauded the possible convergence of chat with the wireless world. But think about it for a millisecond: IM works well on the Net, because it tells us if our “buddies” are online. Keitai in Japan, however, are always on the network, so where’s the added value of online buddy notification? And what about ease of use? Chat is fine if both (all) parties are at a keyboard, but thumb-typing real-time chats on a cell-phone keypad is going to require seriously nimble fingers.

(Note that IM is a sticky subject for AOL right now. Since it has blocked the IMs of rival services, the topic has become a bone of contention in the congressional review of the pending AOL/Time-Warner merger.)

Analysts are saying (can’t you hear them, singing like a Greek chorus ?) that this deal looks particularly sweet from DoCoMo’s point of view, that the alliance should give the company leverage as it tries to hawk its i-mode service in the U.S. and Europe — markets where the WAP protocol, the biggest barrier to i-mode acceptance, is more entrenched. However, it’s difficult to gauge how much influence the AOL partnership will give DoCoMo’s export campaign. Ultimately, the decision still remains with the handset manufacturers and the bodies that steer wireless protocols.

Still, if DoCoMo can use AOL and its many marbles to export i-mode, more power to them. Meanwhile, DoCoMo will continue to pursue other agreements, such as the one it recently struck with KPN Mobile, a Dutch cellular phone carrier.

Aside from the nuts and bolts, the deal makes sense because AOL and DoCoMo’s approach to consumers couldn’t be more parallel. They are masters of transparency. Many novice AOL users are still probably unaware of where the boundaries lie between AOL and the Net. Likewise, i-mode users just press the little “i” button to hop online — no need for handshakes or passwords. Of course, both services have their blemishes (spammers, perverts, outages — you name it, they’ve had ’em), but ultimately they’ve done an impressive job of keeping up the network reliability/content quality.

Another potential merit of the alliance will emerge within the ultrafast third-generation networks. If AOL and Warner finally tie the knot, we might be seeing multimedia content (CNN news reports, music videos, etc.) on DoCoMo handsets by spring. Will you be yawning then?