Social Media: Yahoo!’s purchase of social blogging platform, Tumblr for $1.1 billion has been a great step towards becoming a more social platform. The fast growing Tumblr has more than 300 million monthly visitors and is particularly popular among the younger generations. And Tumblr has a strong presence on mobile, and gives Yahoo! a solid presence in the rapidly growing segment of mobile advertising. Yahoo! has fallen behind larger Internet rivals, Google and Facebook Inc (NASDAQ:FB), in terms of having a solid footing on mobile, and Tumblr seems like a great way to enhance its position on mobile devices.
Mobile and Photo: Yahoo! Inc. (NASDAQ:YHOO) recently disclosed that its user base on mobile has crossed more than 300 million monthly users. And it is working on ramping up its presence on mobile to keep up with secular trends towards smartphones and tablets. The company’s management is working towards developing more consumer friendly mobile apps and redesigned services of its existing products. The company’s Flickr photo service has been redesigned in order to stimulate consumers and get more people to stay on apps for a longer timeframe. If Yahoo! can develop a more compelling strategy on mobile devices the company’s impressions on mobile will grow as well, which will create incremental revenue sources.
Threats
Competition for Users: No surprises, the global growth in Internet usage and companies has led to fierce competition for user eye-balls and user engagement. Yahoo!’s biggest competitors including Microsoft, Google and Facebook Inc (NASDAQ:FB) have very big fan-followings and most of which compete directly with a number of Yahoo! offerings.
Online advertising market: Online advertising marketplace is intensely competitive with companies of numerous sizes vying for advertising dollars. Yahoo! has been losing out to bigger rivals in the space in terms of monetizing its search and display businesses, as advertisers have embraced more popular consumer platforms like Google and Facebook. The U.S. digital ad market grew more than 15% in Q1 F’13, according to the Interactive Advertising Bureau, but Yahoo!’s revenues have actually declined roughly 7% lagging the growth of the sector.
Going forward
Yahoo! Inc. (NASDAQ:YHOO)’s investment holdings are becoming invaluable, but the core businesses haven’t seen much growth. The company has taken steps in the right direction by growing its presence on mobile, video and social media. And if Yahoo! can get more consumer impressions by making more changes to its user interface, the company can do very well in the future.
The article Yahoo!: A SWOT Analysis originally appeared on Fool.com and is written by Ishfaque Faruk.
Ishfaque Faruk has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook, Google, and Microsoft. Ishfaque is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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