Yahoo! Inc. (NASDAQ:YHOO) in order to survive, needs to do something big. In Harry McCracken’s words, they have to rollout a “transformative” service or application which will carry them to a more prosperous future.
But is Yahoo! Inc. (NASDAQ:YHOO) on the verge of rolling out such a service or app? McCracken, who is technology editor for Fast Company, tells CNBC’s Jon Fortt there is a possibility that the company is working on such a project and it might have something to do with messaging.
McCracken recently spoke in an interview with the network after he wrote a Fast Company profile on Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer. In the process of making the report, he interviewed people from the company including Mayer herself.
The Fast Company editor tells Fortt and his colleagues at CNBC that what Mayer’s company is lacking at the moment is a product or service which will become massive in terms of adoption, and consequently, its ability to make money for the company.
“What they have not done is to roll out a transformative app. When you look at how Google got big, they did the search engine, they did Gmail, they did Google Maps. These were transformative not just for Google but for the industry. Yahoo’s apps have been things like news digest and weather which are very nice but they are not going to become ginormous businesses by themselves. And I think if Yahoo is going to go to the next level, they have to do something transformative in terms of things consumers want.
Fortt points out that Mayer has been given a long time to prove herself as capable of turning around the company she is leading, even though Wall Street tends to be impatient.
In the interview, McCracken also points out earlier that the company’s test will come after it spins off its Alibaba Group Holding Ltd (NYSE:BABA) stake. This is when Yahoo! Inc. (NASDAQ:YHOO) has to prove it has a transformative product, like a possible revolutionary product in Messaging.
“When I talked to Marissa Mayer, she cheerfully said that yes, they need a bigger thing. One of the things she mentioned to me specifically was messaging. Yahoo has this long history with Yahoo Mail and Yahoo Messenger of having huge scale there and they have not been there yet with messaging [at the moment] but that could be a big deal for them,” McCracken tells Fortt.
He also points out that investors and the public in general have to be a little more patient waiting for a company to roll out a “transformative” product because developing such products take time.
Yahoo! Inc. (NASDAQ:YHOO) shareholders includes James Dinan’s York Capital which owned about 9.4 million shares by the end of 2014. York Capital added the Yahoo shares to its portfolio during the October to December quarter of last year.
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