Yahoo CEO Slams “Splintered” Brands

In her earnings-call debut, Marissa Mayer acknowledges the Internet giant needs a “focused, coherent mobile strategy.”
Taylor ProvostOctober 23, 2012

During his first day on the job Monday, spanking-new Yahoo CFO Ken Goldman, formerly CFO of security vendor Fortinet and customer-relationship giant Siebel Systems, touted Yahoo’s “massive loyal audience and very promising products and properties in virtually every major category” during the company’s third-quarter earnings call.

But there is one major category, said chief executive officer Marissa Mayer, where Yahoo is missing the mark: mobile. Mayer, who was also making her Yahoo earnings-call debut, stressed the importance of mobile strategy to the future of the online search company that has long been recognized as a perpetual bridesmaid to Google’s bride.

“Mobile represents not only a daily habit, but a fundamental and massive platform,” said Mayer, that Yahoo would have to master “to be relevant.” Accordingly, she said, Yahoo has redesigned its mobile search page across 23 countries. It also released an updated mobile app for its photo-sharing community site Flickr, which has 51 million registered members. But Mayer admitted the company still “hasn’t capitalized” adequately on mobile opportunities.

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“We haven’t effectively optimized our websites. We’ve underinvested in our mobile front-end development, and we’ve splintered our brands,” she said. “We have more than 76 applications across Android and iOS,” which makes it almost impossible for users to relate to Yahoo as a single brand or platform. “All of this needs to change,” said Mayer. “Our top priority is a focused, coherent mobile strategy.”

Mayer argued that Yahoo is well positioned to join the mobile space race because it already offers the things people are looking for when they use their smartphones: news, weather, sports, and stock updates, as well as videos, photos, and games. And when an analyst asked if Yahoo would be able to succeed in mobile without offering its own operating system (such as Google’s Android, Microsoft’s new Windows RT, or Apple’s iOS6), Mayer said being OS agnostic was an advantage; an opportunity to succeed across all platforms.

The company didn’t describe its mobile advertising strategy, which has been the rock over which Facebook and other tech companies have stumbled. Mayer simply stated that advertisements on the web and in mobile would soon be “more precisely targeted” to engage users. Search-related ads for the company saw an 11% increase in sales in the quarter, Goldman said.

Yahoo isn’t Google, and knows it never will be. But it has 700 million loyal users worldwide. And with half the population of the United States owning smartphones, investors seem to have recognized the company’s growth potential should it find the mobile path it is so desperately seeking. Yahoo’s shares rose 6% Tuesday following the earnings call in which it reported third-quarter revenues of $1.09 billion, a 2% increase year-over-year, and a figure slightly above analysts’ expectations.

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