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After a year at Yahoo, Mayer still sprinting to catch up

Zach Miners | July 16, 2013
With Yahoo CEO Marissa Mayer taking steps to transform the company back into a top-tier player, reports are out that Yahoo is in talks to buy Hulu for as much as $800 million.

The list of acquisitions she has made is diverse. It includes MileWise, a flight rewards app; GoPollGo, a social polling service; Astrid, a to-do app; Qwiki, a mobile video app; Rondee, for making conference calls; and Summly, which summarizes news articles into snippets of text.

Some struggled to see how the grab-bag of acquisitions fit together. "I'm not sure I actually get it," said Gordon of the University of Michigan. "A free conference calling service? We're going to use that everyday? News snippets?" If Mayer explained how the acquisitions fit together, "the future would look clearer," he said.

Perhaps more importantly, according to Gordon, "those mobile enhancements are not compelling enough to bring anybody back."

Others are more optimistic. They see the deals as a way to acquire engineering talent that can be put to use improving services and building new ones. The value of the acquisitions could take some time to become apparent, Greenlight's Pourous said. He gave Mayer an "A" for effort but said her final grade is "yet to be determined."

If mobile is a cornerstone of Mayer's strategy, then Yahoo's mobile weather app could be an example of how the company is doing things right. Rolled out in April for iOS, the app has been praised for its polished interface, and for how it uses photos from Flickr to illustrate local weather conditions, which can provide nice exposure to users of the photo sharing service. It has a 4.5 star rating in the App Store based on more than 1,000 reviews.

While it may not be easy to see how all the acquisitions fit together, some say the steps Mayer is taking — which also include redesigning existing services and killing off some older ones — are the steps needed to get Yahoo back on track.

"Marissa has to keep the company going, build on advertiser revenue, and expand properties, but do it in mobile-friendly way, and that means having to change the product set to accommodate new platforms," said Brian Blau, an analyst with Gartner.

"It appears she's going through all of the different products and services at the company one by one and attempting to salvage whatever she can, and adjust them to what I would consider a more appropriate set of products and services," he said.

Mayer's big move of the year was her decision to acquire Tumblr for about $1.1 billion. The deal was designed to expand Yahoo's user base and broaden its advertising options, but analysts say the company will need to monetize Tumblr carefully, without driving away its young demographic.

The trick, said IDC's Weide, is for Yahoo to integrate advertisements that appeal to younger people, and do it in a way that users won't know the ads are coming from Yahoo. It will also have to figure out how to keep ads from appearing next to pornography or inappropriate content, he said. Tumblr allows some of that type of content, and it can upset advertisers, as Facebook recently found.


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