Home » Uncategorized » Why Yahoo! acquiring so many Social and Mobile Apps companies?

Why Yahoo! acquiring so many Social and Mobile Apps companies?

And Yahoo! acquired one more company – Rondee on 13th June, 13.  This year it is Yahoo!’s 12th acquisition in series. They had acquired Snip.it (Social Network) in Jan, then Alike (Social recommendation), Summly (News aggregation) and Jybe (Social recommendation) in Feb/ March time period. The series continued in May with four acquisitions in Mobile apps / gaming area – GoPollGo, MileWise, Loki Studios and Playerscale. May also saw acquisition of Tumblr in blogging field. On 12th June it was GhostBird software (Mobile apps) and on 13th Rondee (Video conferencing). (reference: https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Yahoo!)

Compared to 2013’s 12 acquisitions so far, Yahoo! had acquired only 2 companies (Stamped and OnTheAir) in 2012 and 3 companies (Spreets, IntoNow and Interclick) in 2011. So I am not sure why Yahoo! is buying so many companies, especially in Social and Mobile area this year? We can have some justification for Mobile Apps area where some monetization can be achieved but difficult to understand how monetization can be achieved through Social Media platforms. Tumblr was $1.1 B acquisition and not sure how the money will be recovered when online ad market is completely dominated by other players.

On 15th June, 2012 YHOO was $15.26 and at the same time in 2013 it is $26.28. Almost 72% up in a year! It is good to know this part but at the same time Yahoo!’s world wide online ad revenue dipped from 3.4 % this year to 3.1 % whereas Google’s worldwide online ad revenue increased from 31% to 33%.  (reference: http://www.bloomberg.com/news/2013-06-13/google-is-projected-to-expand-lead-in-online-ad-market.html)

So question is though Marissa Mayer is changing the face of Yahoo! through restructuring and acquisitions but the direct question is how are they going to recover their investments and the indirect question is how are they going to attract end users to their “social media” platforms from big players like Facebook and Google plus?


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