Yahoo Acquires OnTheAir, Betting Big on Mobile

Ever since former Googler Marissa Mayer took the reins at Yahoo, observers have been speculating about the venerable but beleaguered search engine’s new direction. A look at the company’s first two purchases since the new CEO came aboard seems to indicate a big bet on mobile apps.

Let’s take a quick step back in time to late October of this year. That’s when Mayer made her first acquisition since arriving at Yahoo. The purchased company, named Stamped, produced a recommendations app by the same name. James Niccolai, reporting on the story for CFO World, noted that the app was developed by former Google employees and had even received financial support from Google Ventures. Mayer visited Stamped shortly after the purchase and tweeted that she was “happy to be reunited with Robby and his team.”

Stamped was an iPhone app that I like to think of as an “external memory.” It let users keep track of restaurants, books, movies, and other things they like, and let their friends know about them. I say “was” because at the time of the purchase, Stamped reported that it would be discontinuing the product at the end of the  year. Users can download a PDF copy of their data. Niccolai noted in his article that they were planning to build a “big, mobile, and new” app for Yahoo, but didn’t supply details.

Yesterday, Yahoo made its second acquisition since Mayer became CEO: a video chat start-up named OnTheAir. John Ribeiro, reporting the story for the IDG News service, noted that “Yahoo sources said the acquisition was for talent, and that the OnTheAir product will not be continued.” Four of OnTheAir’s five-member team hold degrees from Stanford, the same college from which Google founders Larry Page and Sergey Brin (and Marissa Mayer, for that matter) graduated. The remaining member of the team, according to his bio, held an interesting job before joining OnTheAir: he worked at Google on infrastructure that supports Gmail and Google+.

Perhaps it’s too soon to call it a pattern, but the similarities between these two purchases can’t be ignored. Mayer acquired two companies that included former Google employees; both firms worked on creating useful mobile applications; and both acquisitions focused on gaining the talent as opposed to the company’s actual products. Clearly, Mayer thinks Yahoo’s future involves making mobile apps.

This shouldn’t surprise anyone who was paying attention when Mayer participated in her first earnings conference call since accepting the position of Yahoo CEO. Juan Carlos Perez, reporting on the call for Computerworld, highlighted her interest in the mobile field, and her desire for Yahoo to do more, and better, in this area. “We’ve made progress, but Yahoo hasn’t capitalized on the mobile opportunity,” she said; Perez noted that she felt “it has ‘underinvested’ in its mobile front-end development.”

Furthermore, according to Perez, Mayer believed that Yahoo’s “mobile product lineup is too fragmented, with more than 76 different iOS and Android applications. ‘Our top priority is a focused, coherent mobile strategy,’ Mayer said. This will involve a significant beefing up of the company’s mobile staff.” Clearly, Yahoo took two steps in that direction by purchasing Stamped and OnTheAir.

So what are the next steps? It’s possible that Mayer will acquire one more company that fits the pattern before the end of this year, but I don’t rank that as a high probability. Rather, I expect this month to be devoted to the new guys settling in and brainstorming, with Mayer dropping some hints (to them, not us, alas) as to where she’d like to see Yahoo’s mobile apps going.

Where, exactly, is that? Count on it not being games, at least not right away (if ever). My guess is that she wants to see these mobile apps fit together in a coherent package, but continue to be useful as standalone applications. I wouldn’t be surprised if Yahoo comes up with something reminiscent of the iPad’s or Windows 8′s approach – done much better.

On the other hand, I don’t see Yahoo getting into its own hardware. I could see them creating custom mobile app packages for specific devices, and working with the manufacturers to install them on smartphones and tablets. It’s also entirely possible that this time next year, we’ll see at least three versions of some impressive Yahoo mobile apps: one for Android, one for Apple’s App Store, and one for Microsoft’s app store. It’s worth noting, at this point, that Yahoo has almost all the pieces it needs among its various products and purchases to build its own full-service computer software package; about the only thing missing is its own web browser. Or it could easily bring all these services together to build a better social site than Facebook (though the less said about Yahoo Groups, the better). We’ll just have to wait and see what Mayer and company cooks up at Yahoo, now that there are some more veteran chefs in the kitchen.

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Terri

Terri

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7 Responses to Yahoo Acquires OnTheAir, Betting Big on Mobile

  • Yoshi says:

    Once she takes the reins as Yahoo!’s CEO, I need to tell her to fire Chris Chase. Does she have a publicist, twitter account, etc.?

  • Elijah luv says:

    http://www.slate.com/articles/double_x/doublex/2013/03/marissa_mayer_is_not_a_feminist_is_the_term_useful_anymore.2.html

    Feminism to a lot of people is a bad word. Many celebrities distance themselves from calling themselves feminists and the vast majority of women and men don’t want to be called feminists. Marissa Meyer, CEO of Yahoo, is one of those women and doesn’t want to be called a feminist. Many people would rather go by the term ‘humanist’ or someone who just believes in equality. Even Hanna Rosin who wrote this article thinks feminism needs to be retooled. What’s interesting is that most of these people believe everbody should be equal, but they just don’t want to be labeled a feminist.
    Sorry, I posted page 2 of the article. This is the first page: http://www.slate.com/articles/double_x/doublex/2013/03/marissa_mayer_is_not_a_feminist_is_the_term_useful_anymore.html
    @Jen, it’s not just men that don’t like feminism. Most women don’t like it either.
    I disagree Jen, I think most people want to be called a humanist because it doesn’t specify one particular gender, class, or race of people, like feminism often does.
    They want equal rights, but they just don’t want to be labeled or called feminists.

  • EzioAuditore1459 says:

    My college conducted a short assignment in which we need to tell our favorites. All of my favorites were females. And, boys and some teachers mocked me up saying I am a feminist loser and what not…
    Whats wrong in having all female idols ???

    By the way, these were my answers:
    1) Fav. Singer – Mariah Carey, Shakira and Taylor Swift
    2) Fav. Celebrity – Angelina Jolie
    3) Fav. Sportsperson – Maria Sharapova
    4) Fav. Scientist – Madam Curie
    5) Person who inspire you the most – Marissa Mayer (as I am doing engg.)
    And, I am a boy

  • ademuth93 says:

    By doing that, she has set working women back 30 years. And by denying employees the right to work from home she has demonstrated that she really does not have the best interest of either her company or employees at heart. Nice that she can have access to her child while the rest of her employees are denied that. I have changed my home page to Google and my email to gmail. I know it does not matter to her but it sure makes me feel better.

  • Rishi says:

    There are several sites out there that have a listing of applications from the app store. Most have nice little features like when things go on sale, when an update comes out, etc. And all of these notifications seem to happen daily.

    I’m wondering how they get their data?

    I’m an experienced C#, VB.NET, PHP developer, so I won’t have a problem scraping a site, or parsing RSS feeds, if need be. I just don’t have the foggiest idea on where to begin my search!

    I kind of dug around apple.com, but I can’t seem to find what I’m looking for.

    Basically, I’d love to be able to get a complete list of every single Apple-approved application (should I coin the phrase “App-app-apps”?), complete with ratings, cost, etc.

    Any help would be appreciated! Thanks in advance!

    Jason

  • Heath says:

    I have just got a new iPhone after having an Android for a while. Over the past year or so Whatsapp has become my main means of contacting my friends so it was the first thing I went looking for in the Apple app store after getting my new iPhone, but I just can’t find it?

    I have searched google and can only find info about it being removed from the app store back in January, but that it was added to the store again a few days later. Nothing about it not being available now? The official Whatsapp website only has a download link that takes me back to the app store, where I get a message saying that the page is in unavailable.

    Why is this? Is anyone else having the same problem? When may it be available again?

    And until then, what is the next best cross-platform messenger? (preferably free or cheap)

    Thanks for any info
    Sam Johnson, I have looked.
    The link just takes me to a page that says “your request cannot be processed” like the others I’ve tried.

  • Taylor G says:

    Okay- I just updated my 4th generation iPod to ios 6. The new App Store is ******* me off!!!! I search for an app and then the store flicks of and I’m back on the homepage??? I’ve only had my iPod since Febuary 2012. Any help ideas/soloutions would be extremely appreciated!!!!

    Thank you

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