Yahoo!, with its acquisitions under Mayer and new product launches, is attempting a similar feat. Monetization, it seems, is the not the immediate goal. Instead, getting users to depend on Yahoo! products and services is step one.
One recent win for Yahoo! in this department is the Yahoo! Weather native app for iOS 7, Apple Inc. (NASDAQ:AAPL)’s upcoming mobile operating system. The app has built-in support for Flickr, another Yahoo! product. The app pulls photos for the appropriate city from Flickr instead of just showing a canned animation, an innovating feature which led to Apple Inc. (NASDAQ:AAPL) awarding the app an Apple Design Award. Apple Inc. (NASDAQ:AAPL) had this to say:
Yahoo! Weather stands apart with its simple, uncluttered, and beautiful visual design. This highly-rated app displays weather details with stunning photography based on time of day, location, and current conditions. Yahoo! Weather has great layout and typography, compelling animations, fast image processing, and clear iconography. This attention to detail means that in a saturated category, an app can rise above the crowd. Yahoo! Weather is available in 30 languages and optimized for all current iOS devices.
A few years ago Yahoo! Inc. (NASDAQ:YHOO) winning accolades for a mobile app would have been unheard of. Now, under Mayer, the company is producing quality products again. If Yahoo! can build on this and offer a stable of popular products the company could start taking advertising dollars away from Google.
Yahoo!’s purchase of Tumblr puts the company in competition with Facebook Inc (NASDAQ:FB), especially considering that young people are increasingly ignoring the leading social media site. Young people are being driven to Twitter as well as Tumblr, and if Yahoo! can successfully monetize the platform and continue to grow the user base then the company could start taking advertising dollars away from Facebook as well.
The revamp of Flickr will also introduce real competition for Facebook Inc (NASDAQ:FB)’s Instagram app, which the company bought for about $1 billion. Facebook has been trying to monetize its enormous user base, but investors have not been happy with the results, sending the shares well below the IPO price. Whether advertising on a social network can be effective enough for Facebook to justify its valuation remains to be seen, and given Facebook’s problems monetizing Tumblr will be no easy task for Yahoo!.
The bottom line
Yahoo! is planting the seeds for growth, but don’t expect to see any real results for at least a few years. Given the state of the ad business we may see things get worse before they get better, but if Mayer can execute and drive users to Yahoo! products there’s a real chance that the company can turn things around. The word innovation and Yahoo! Inc. (NASDAQ:YHOO) haven’t appeared in the same sentence in a long time, and the new Yahoo! is trying to change that.
The article The Future of This Internet Company originally appeared on Fool.com and is written by Timothy Green.
Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Timothy 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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