Yahoo, once dubbed as force behind explosion of internet, is
languishing behind its main competitors. The total valuation for the company in third quarer of 2012 came down to $9 billion, from $128 billion during heights dot com
bubble. In 2012, Yahoo’s board of directors have taken a significant step
towards its revival by roping in Marrisa Mayer, former google search and mobile
executive, as the C.E.O of Yahoo. Ever since Marissa took the office, Yahoo has been on an acquisition
spree during which it has reportedly spent around $2 billion.
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| Yahoo's mobile services |
The acquisitions include an impressive list of mobile-based
startups alongsideTumblr, Xobni and Aviate etc. A closer look into these seemingly
random acquisitions, some of them include startups with utter lack of revenues,
would reveal strategy Yahoo is planning to pursue in the future. Yahoo, being a
web-based company itself, identified that its future growth would be driven by
its mobile-based products and search. In addition, Yahoo, which was once a very
attractive place for high quality engineers during late 1990’s and early 2000’s,
is finding it difficult to attract high quality creative and engineering
talent. This formed the genesis behind Yahoo’s Red Ocean Strategy of Acqui-hiring,
where it started acquiring companies with expertise in building innovative
mobile platforms, to compete in mobile space. The employees of these acquired
companies would then be locked in a 2-4 year contract with Yahoo. This is
reflected in the fact that Yahoo has closed down 31 out of 38 startups acquired
under Marissa’s leadership.
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| Aviate, personalized mobile platform service |
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| Aviate's flagship features |
Alongside making strides towards positioning Yahoo as a
mobile-first company, Yahoo has also focused its efforts towards ‘Search’. Through
its acquisition of Aviate, a contextual mobile-based platform which learns about
users behaviors and displays applications at the right place and right time for
the users, Yahoo is seemingly betting big on contextual search, which it
believes is the future. If Yahoo manages to bridge mobile services with
contextual search, it would be able to provide true personalization to its
users which goes beyond intuitive. This would also ensure that Yahoo will
remain competent in web space, where companies like Google, Facebook and Amazon
etc are currently dominating. Whether Yahoo manages to convert its Acqui-hiring
into substantial results will remain to be seen.
-Bharath
References:-
2) venturebeat.com/2014/01/07/let-the-2014-acquisition-spree-begin-marissa-mayer-reveals-yahoos-acquisition-of-aviate/
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