Yahoo Playing Catch-Up with the Mobile Industry

by Matt Klassen on June 16, 2014

When Marissa Mayer assumed the role of CEO of Yahoo two years ago the search engine giant was teetering on the precipice of irrelevance, unable and unsure of how to compete in a tech market that was quickly transitioning from a traditional desktop-centric approach to one almost exclusively dedicated to mobile platforms. But Mayer had a bold plan to make Yahoo relevant again and it sparked a two-year acquisition binge that has seen the firm scoop up billions in mobile assets, all with one goal in mind: catch-up to everyone else.

“We came to that realization that, wow, we are late to the game,” said Adam Cahan, Yahoo’s Senior Vice President of Mobile and Emerging Products. “We are 12 months — maybe 18 months — late to the game. We need to play really rapid-scale catch-up.”

That realization, Cahan explained in a recent interview, meant that Yahoo had to entirely rethink its position in the market, its role as search provider and a hub for online services, and its presence on mobile devices. Now, almost 40 acquisitions later, Yahoo is “rounding the corner” when it comes to the monetization of its services, finally in a position to compete with Google and Facebook when it comes to attracting your online attention…and your money.

Having arrived at Yahoo after his own start-up was acquired by the online search giant, Cahan’s tenure at the company is only slightly longer than Mayer’s, the two forming a leadership duo that has brought the firm out of its desktop-centric past and into its mobile-centric future.

As mentioned, over the last two years Yahoo has acquired companies at a breakneck pace, with almost 40 acquisitions during that span. While admittedly most were small start-ups like the natural-language start-up SkyPhrase or the mobile-video start-up Ptch, the company did make a huge splash when is grabbed the popular blogging platform Tumblr, Mayer’s most significant purchase to date.

While such a spending spree certainly has people talking about Yahoo’s ultimate goals, Cahan explained the rapid expansion in the simplest terms possible: Yahoo had to acquire those companies to stay relevant. “We used talent acquisition as one of those ways of getting us to scale,” he said. “The vast majority have been, by the numbers, talent deals.”

The ultimate goal, of course, is to utilize these new properties to help lure users away from rival online services, particularly from established competitors like Google and Facebook, who have successfully transitioned their advertising efforts from desktop computers to mobile devices. If Yahoo is to regain relevance it has to find a way to monetize its newly developed mobile services, and, as Cahan noted, it seems the company is well on its way.

But that’s not to say that Yahoo has succeeded in reviving itself, at least not yet according to Cahan. “We will know we’ve been successful when we return the company to growth,” he said. “Generally speaking, that’s the mandate.” As it stands, however, despite this torrent of acquisitions the simple reality is that Yahoo still remains largely irrelevant, now its time to see if Mayer and Cahan can change that.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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