Nokia looking at big picture

Nokia Corp., the world's dominant cellphone maker, is positioning itself to compete against the likes of MySpace, iTunes, and Google, and is anchoring a key part of its new business in the Back Bay.

In the midst of an acquisition spree and corporate restructuring that pushes the Finnish company beyond just creating slick handsets, Nokia this month relocated the headquarters of its mobile ad business to Boston with the acquisition of Enpocket, a Back Bay firm that creates ad campaigns for cellphones.

"They want to be more than just a phone purveyor, or an infrastructure purveyor. They want to be involved in the whole value chain," said Roger Entner, senior vice president of communications sector for IAG Research. "That's why they bought Enpocket. They want to make this a substantial part of their business, ideally with billions of dollars."

Nokia already makes one of every three phones sold worldwide. But as the handset market has matured, the company has expanded its business strategy, leveraging its market share to create an ongoing relationship with customers who own its gadgets.

The company has said it will reorganize in January to include a unit dedicated to software and services, along with its more traditional focus on devices and markets. And over the past year, the company has made acquisitions unusual for a gadget maker.

Last year, Nokia bought Loudeye, a digital music platform and distribution company for $60 million. This summer, Nokia bought Twan go, a company that developed a platform to let people share content online and on their phones. This month it said it would buy navigation and mapping company Navteq for $8.1 billion.

Nokia has already launched Mosh, a social network that allows sharing of media online or from a phone. In late August, it unveiled Ovi, a portal to Nokia's Internet services that will initially include a music store, maps, and games.

To enable new revenue streams from those services, however, Nokia will need to either sell its services to customers or carriers, or support its new products with advertising - a business that Enpocket has been working in since 2001.

"Nokia has already announced its intention to be a leading company in consumer Internet services, and we believe that mobile advertising will be an important element in monetizing those services for our customers and partners," Nokia chief technology officer Tero Ojanpera said in a statement.

In the same way that online advertising has allowed people to access content without paying a fee, industry watchers foresee an ad-supported mobile Internet growing up. Cellphone ads must be carefully constructed so they don't alienate users, but they do offer an extremely targeted platform, ensuring ads can be tailored to an individual's interests and even location.

While mobile ad spending is valued at $2.8 billion worldwide in 2007, it's projected to grow to $16.2 billion by 2011, according to research firm eMarketer.

"Advertising is a key part of the revenue from the software and services business," said Mike Baker, head of Nokia's mobile advertising division and former chief executive of Enpocket. "This company really sees itself one day competing with Microsoft, Google, and Yahoo in this space."

Nokia's reach and its recent set of acquisitions may give it unique ability to integrate services, such as location-based search and advertising, although it could face resistance in the United States where wireless operators exert strong control over the user experience and often have competing services, such as their own navigation services or music stores.

The deal to buy Enpocket also speaks to Boston's strength as a powerhouse of mobile advertising, Entner said. Enpocket was a major player in the nascent mobile advertising space, making cellphone-size campaigns for brands like Ford and McDonalds, and supplying Sprint Nextel with advertisements. This year, AOL acquired another Boston mobile ad company, Third Screen Media.

Enpocket currently has about 100 employees, and Baker said he foresees doubling the headcount as the business grows.

"This is connecting Boston into the world of interactive media," he said. "We don't have a lot of global businesses building in Boston now."

Carolyn Y. Johnson can be reached at cjohnson@globe.com.