Can Yahoo Transform Into a Mobile Company?

yahoo-logoMobile has become the guiding mantra of Yahoo (NASDAQ:YHOO).

Last October, during her first post-earnings conference call as chief executive officer, Marissa Mayer explained that the web portal faced a large challenge: expanding into mobile. “Yahoo has to ride the platform shift in order to be relevant,” Mayer had said then. “We’ve underinvested on mobile front-end development.”

She echoed the statement at the Goldman Sachs technology conference in San Francisco on Tuesday when she acknowledged that Yahoo’s business needed to boost usage in order to grow revenue. She added later in the presentation that mobile was the primary area for that growth to occur. “And then when you think about mobile,” she added. ”When you see triple-digit growth in some areas, there’s a big opportunity for growth.”
In Mayer’s opinion, the key to creating mobile growth was the development of a core group of Yahoo-based applications — such as mail, search, and sports — that can be downloaded and used on smartphones. In the third-quarter call, Mayer told investors and analysts that she planned to hire mobile developers and designers in order to grow Yahoo into a mobile company, and she has kept her word. Yahoo has been scooping up mobile and social media start-ups to gain access to not only their technology, but to their store of talented engineers. These new employees are expected to lead Mayer’s transformation.

Yahoo also made an important acquisition on Tuesday, one that will help the company better its users’ mobile experience. VentureBeat reported that the company had purchased the location-discovery app Alike, which will shutter its iPhone and web applications and join Yahoo’s mobile team. The fact that Yahoo will not simply repurpose the company’s app indicates that it has plans to integrate both the engineering team and its technology within its mobile experience, rather than leaving the application as a stand-alone product…
With a series of purchases already in the works, Yahoo has shown it will not hesitate to make acquisitions to further its mobile aspirations. In January, the company bought Snip.It — which is a Pinterest-like curation tool — to add a social layer to its homepage, and it also snatched up the development team that created the video platform OnTheAir last December.

Already, Yahoo has boosted its mobile presence with applications developed for Apple’s (NASDAQ:AAPL) iPhone, Google’s (NASDAQ:GOOG) Android, and Microsoft’s (NASDAQ:MSFT) Windows 8. But still, many of the company’s 200 million monthly mobile users access Yahoo services via pre-installed iOS apps, which do not carry advertisements, a problem for a company that derives a majority of its revenue from display ads. Creating original programming had opportunities, Mayer noted in her presentation at the technology conference, and that was why she was boosting Yahoo’s acquisitions of mobile companies staffed by innovative engineers.

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