When I am talking to somebody about searching for something on the Internet, it is often common to say: "I think I'll Google it" because the search engine has become such a commonality in our lives. Who is going to be the search engine of the future? If Yahoo (YHOO) has anything to say about it, it will be them. The company is presently changing its advertising and marketing, moving away from aging demographics to become more acceptable to young adults.
For some reason Yahoo thinks it used to be "cool" and got away from that a couple years back. At least this is what CFO Ken Goldman said. The company intends to attract 18- to 34-year-olds by becoming visible through an aggressive advertising campaign which would include things like outdoor billboards and sporting events, just to name a few. This is going to take a big budget to make it happen. Moving away from an aging demographic and reversing its multi-year decline in revenue has been a challenge, but the company intends to use different things like social engagement on its website as well as a young mobile platform.
Since the relatively new CEO Marissa Mayer took over last summer, the stock has risen about 70%. Before one attributes the growth to her alone, may I point out that some analysts believe a large portion of the value is due to stock buybacks and also because Yahoo's Asian assets are growing in value. Some changes are already noticeable and if you use Yahoo at all, you will have seen a different look and feel in its mail service as one example of the changes the company is making more relevant to young people.
Employee Involvement And Support
One of the relevant issues that Yahoo is addressing is building employee loyalty, trust and enthusiasm in the company they work for. This is taking place by getting them involved in how the company operates. Mayer has had employees around the globe asking pertinent questions about anything they can think of, dealing with things from company policy to products. The intention behind this is to create ownership as well as provide motivation and encouragement. Has this approach worked so far for the company? Almost 500 product related issues raised by the staff have already been solved.
Employee enthusiasm gives way to creativity as the company brainstorms ways to attract young customers. One of the ways the company is attempting to attract youth in the mobile market is through a "mobile platform" that is designed just for them. The company has been aggressively doing this through redesign and acquisition. Yahoo recently added 22 entrepreneurs to its mobile team and has made four recent acquisitions geared towards the youth mobile platform. These are the additions the company has made:
Astrid - With 4 million users, this social productivity platform logged 30 million plans on the platform in one month last year alone. Yahoo hopes to scale out this platform for greater usage. The app allows users to create "to do" lists and reminders that can also be shared with others. Presently it runs on iPhone, iPad, Android and Windows desktop and mobile.
GoPollGo - This is a real time polling tool that allows brands and media properties to collect and analyze feedback. Yahoo is hoping this app will make travel planning easier and more personalized.
Milewise - Is a frequent flyer search app.
Loki Studios - A mobile game application platform presently centered around a flagship "location aware game" named Geomon. This is a very interesting game with many different outcomes. The user incorporates data into the game including weather, temperature, time of day, season and geographical region. If a person is in the mountains or in the desert the game will be totally different because of the variety of information entered into the playing game. There is more opportunity to develop more games through this company for Yahoo.
Yahoo Adds Ammunition: Tumblr
One of the latest acquisitions that Yahoo has made to back up its desire to be the top search engine is its acquisition of Tumblr. It recently announced a $1.1 billion deal to buy the very popular blogging site which boasts 300 million monthly visitors and 120,000 new people signing up every day. This is a hot site among young people.
This may be a make or break move by Mayer. She believes the company will provide a definite hook that will bring in more traffic and advertisers for mobile and tablets. Getting there may provide more difficult than one imagines though. Tumblr has hardly been subject to advertising at all since its inception six years ago. In Yahoo's attempt to generate more revenue through the company, it has to make sure that it does not alienate present users.
Yahoo is a going to have to continue to modernize its "user engagement" to be relevant. Even though the value of the stock has risen, Yahoo's market share has not stopped deteriorating across very important segments for the company. Decline has slowed down but we really need to see a turnaround where the company's picking up market share again. One can describe Yahoo as an "unwanted stepchild" among big social search sites such as Google (GOOG) and Facebook (FB). The company lags far behind these two when it comes to attracting youth and continues to work on changes both inside and out to make itself the first thought that users have when it comes to searching on the web.
These are some examples of how Yahoo is developing its mobile platform for young people. Within the next 10 years, Yahoo plans on becoming a major "mind set" among young people and no longer the unwanted stepchild among search platforms.