Before Mayer takes an all out aggressive stance on mobile content and subsequent ad deals, she will have to make sure that she has the arsenal and strategic advantage. It’s all about timing.
Beefing up the arsenal
The reason why investors are unmoved by suspect reports and recurrent negative outlook on Yahoo! Inc. (NASDAQ:YHOO) is that they know what’s brewing under the acquisitions and human resource restructures. And more importantly, they know it will be instrumental in securing the market in the long run
If you take a more definitive look at all the 12 companies that Mayer has acquired since her tenure begun at Yahoo!, you will realize that there is very little overlap in the markets that these companies previously addressed. This means that Yahoo! is building raw numbers; numbers that it intends to transform into active users later on.
For instance, her late 2012 acquisition of OnTheAir, a mobile app that allowed users to host online talk shows, allowed her to rope in users with interests in discussions on industry trends. This suggests a working demographic. In another case, Mayer oversaw the acquisition of Astrid task-management app, which again addressed professionals with daunting schedules.
In the most prolific acquisition, Mayer signed off to the $1.1 billion Tumblr acquisition. With 117 million unique global visitors each month, Tumblr again presented a totally different demographic. Tumblr nests a younger demographic relative to Yahoo!. In addition, it mainly has content revolving around arts, food, music, and travel. Yahoo!, on the other hand, primarily concentrates on finance, news, and sports.
This rich mix of unique content at Yahoo!’s disposal, coupled with all the talented engineers and entrepreneurs that it has added to the company, will allow it to tailor its content moving forward. I believe that it will be able to accurately personalize content for all its users in the near future. This will transform the raw numbers at its disposal into active users. What’s more is the fact that Mayer has worked on overhauling the work culture at Yahoo!. She has also stamped out the fear of layoffs during the turnaround and in the process motivated Yahoo! workers toward achieving organizational goals.
Conclusion
Though no direct impact of Mayer’s acquisitions and human resource restructures will be felt in the near term, the long lasting effects will greatly push the stock back to its esteemed highs. Yahoo!’s turnaround is real and the long-term outlook is bright.
Lennox Yieke has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Lennox is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Mayer’s ‘Shopping Spree’ Brightens Yahoo!’s Long-Term Outlook originally appeared on Fool.com is written by Lennox Yieke.
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