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Report: Yahoo working on search tech that could displace Microsoft

  • Kara Swisher reports Marissa Mayer (YHOO +2%) has launched two projects - codenamed Fast Break and Curveball - aimed at creating proprietary search and search ad technology, and that the efforts are "part of a contemplation of how Yahoo can accelerate the end or even end its long-term search and advertising partnership with Microsoft (MSFT +2.7%)."
  • The effort is said to involve top Yahoo execs, including three product SVPs, and to feature just a 3-4 month timeframe. Over time, it  could "result in a full search engine, possibly more oriented to mobile than the desktop."
  • Marissa Mayer has voiced displeasure with the performance of the Microsoft deal, under which Yahoo's results and search ad platform are powered by Bing, and has reportedly considered abandoning it before.
  • However, the deal is set to last until 2020 and currently features revenue/search guarantees (the latest renewal expires in March). Any attempt to create a fully-fledged search alternative to Google and Bing would carry both monetization risks and require massive R&D investments.
  • Yahoo's search paid clicks rose 17% Y/Y in Q4, less than Google's 31%. StatCounter estimates Yahoo has a 3.1% global search share, compared with a 90.3% share for Google and a 3.3% share for Bing. Yahoo's mobile/tablet search share is pegged at 3.99%.
  • Previous: Microsoft up following Nadella/Gates report
Comments (26)
  • Mobile/Tablet search is the key for future growth. Apparently, Google and Facebook are the leading players now. Yahoo as an underdog, it is quite difficult for them to compete with others. IMHO, Yahoo should try to develop a killer app on these platforms at first. Then, they can make something inside that killer app. Good examples of a killer app are: Instagram (Facebook), Map (Google, Apple), Youtube (Google), Twitter, Facebook, Snapchat(Tencent invested), WhatsApp and Weixin/Wechat (Tencent).
    Report shows that people use apps on the first page of their screen more frequently. And among all the apps in the first page, there are several apps being used extremely frequently than others.
    As long as Yahoo still holds the stake in Alibaba and Yahoo Japan, they still have some time to figure out what they can really do on mobile/tablet platform, though the time they have is limited. Current shake off provides an opportunity to enter Yahoo.
    31 Jan, 04:14 PM Reply Like
  • It's a terrible time to enter Yahoo right now. See my post below. Yahoo is a trainwreck and the money from Alibaba will be drained away just like Mayer did to the first money she got from Alibaba (a deals that was struck long before she arrived on the scene). Shareholders are nuts to stick around. Past is always prologue. Buyer beware. And there was another Yahoo Mail failure again yesterday after the last one several weeks ago with viruses, after the screw up of the financial pages. Ad revenue is plummeting and worse, long time Yahoo visitors are leaving in droves for other sites.
    31 Jan, 05:07 PM Reply Like
  • The image of Marissa is more like a shopaholic instead of a CEO of a Tech company now. Not only people in Yahoo are struggling on monetizing of all the companies/apps their boss bought, investors are also concerned when Yahoo could really make money from those apps. That is exactly why I am thinking they should get (either develop or buy) one killer app. They should not expect everyone will install all those apps, they should try to make one app that most people would like to install on their phones/tablets.

     

    Please do not underestimate the value of Alibaba. The recent report of Yahoo only disclosed the result of Q3 2013 of Alibaba. However, the Q4 report is something really mean something. The revenue from that quarter usually takes 40% or more of Alibaba's annual revenue. That would be a big number.

     

    The question now with Alibaba is Jack Ma and his team are downplaying the Alibaba Group. They don't want to get a very high IPO valuation, like $150B the street has estimated. Why is that? Because they don't want to spend too much to purchase the 50% of shares that Yahoo holds at IPO (Yahoo and Alibaba reached a deal several years ago, Yahoo will sell 50% of their remaining shares at an eligible IPO). If they can get a low IPO price, that means they can buy back those shares at a lower cost. They can keep the control of Alibaba.

     

    All these factors are causing concerns in investors. However, the price dropped recently to a level below a valuation of the company in a very conservative estimation (about $37-38). That is why I am saying this provides an opportunity to enter Yahoo. If the market will continue to take some correction in the next few weeks, we may see $32 or even $28. I may add more at that time.

     

    31 Jan, 05:57 PM Reply Like
  • Let me see, She of The Blue Dress is blindly imitating whatever she saw at Google. Not a single original idea in return for all that money she pays herself via a starry eyed tame board.
    Or perhaps she has great and original ideas. As they say, her great ideas are not original and her original ideas are not great.
    31 Jan, 04:14 PM Reply Like
  • Yeah, I agree... Yahoo will never have the resources that MSFT and GOOG have on developing the search engine. If anything, she should partner up with MSFT even further to leverage their operation even further.

     

    I go into YHOO last year in the spring and got out this week. I was a believer in Mayer last year but am not anymore.
    31 Jan, 04:44 PM Reply Like
  • The faster Yahoo! can detach itself from yesteryear companies like Microsoft, the better. As valiant as the Bing effort is, outside English speaking countries, it is neigh on useless. Any effort that diminishes Google's unwholesome near-communist country style grip on search and data mining has my support.
    31 Jan, 06:16 PM Reply Like
  • The only way Yahoo is going to do anything is to first get rid of Mallissa Mayer the queen of front page flubber. What pixel is the search box? Plus, I only have 3Mbp/s download, but all of the flubber on the Yahoo landing / search page eats it all up before I can search. Yahoo looks like a tabloid. Yahoo mail is a premier landing spot for spam, also, with a cluttered interface that seems to change daily. It's no wonder Dan Loeb left. She's incorrigible and ruining the company, as decreasing profits show since Dan left.
    31 Jan, 06:23 PM Reply Like
  • Don't be bitter that you missed the YHOO train. The days of testosterone fuelled gung-ho male top execs are over. Get yourself a modern internet connection and you'll be alright.
    31 Jan, 06:29 PM Reply Like
  • Nothing is forever, not the iPhone, not Android and certainly not Google's search. Stating that MSFT is obsolete is absolutely pointless, and demonstrates a good amount of investing intelligence immaturity as time after time MSFT has demonstrated an unprecedented level of resilience and ability to persist innovation.

     

    I am a very happy long term MSFT investor. Last year I thought I would also be one for YHOO, but now I am quite confident that I have made the right decision to get out of this stock. I may, instead, add to my MSFT position.
    31 Jan, 08:39 PM Reply Like
  • Smells like total desperation. Microsoft is paying Yahoo right now money that Yahoo needs. Marissa apparently has already spent in her mind all the rest of any Alibaba money Yahoo will get when (and that could be a long time) the IPO happens. She gave nothing of the first Alibaba money back to shareholders and went on her now-infamous (and failed) spending spree. Her epic failure with hiring and then firing Henry DiCastro who walked away with over $100 Million for a few months on the job, her paying $1.2 Billion for Tumblr which never has been monetized and more should scare investors.

     

    Mayer did not cut the Alibaba deal. It was done before her. She has accomplished nothing since she arrived except spending all the Alibaba money that should have gone to shareholders on stupid and failed projects. No wonder Dan Loeb jumped ship.

     

    This news about trying to ditch Microsoft just shows how desperate she now is. Yahoo shareholders who are waiting for the Alibaba IPO might want to think twice because Mayer already has plans how to waste that second tranche as well.
    31 Jan, 05:02 PM Reply Like
  • as much as Yahoo has screwed up their email I would not trust their search engine.
    31 Jan, 05:03 PM Reply Like
  • Mallissa Mayer. Two words Yahoo needs to get rid of before it hits pre Dan Loeb prices. Yahoo has turned into a garbage heap since he left and she took over.
    31 Jan, 06:25 PM Reply Like
  • Their portfolio pages don't seem to be working very well anymore on iPad or Mac desktop.
    1 Feb, 09:35 PM Reply Like
  • How is Yahoo going to R&D search tech that will displace anybody? Search tech is done, sealed and delivered with little room left for innovation that will displace Bing or Google. Yahoo is going to succumb to not having their own app ecosystem or any enterprise ecosystem.
    31 Jan, 05:45 PM Reply Like
  • Yeah, they should jsut go full tabloid like the yahoo site looks like anyway:

     

    Sister Kills BABIES!
    MOM KILLS HUSBAND!
    SNOW 20' SMOTHERS BABY!
    SHOOTER KILLS GRANDMAQ!

     

    What a bunch of nonsense.
    31 Jan, 06:26 PM Reply Like
  • I want to know all about MOM KILLS HUSBAND on my morning commute; it's essential.
    2 Feb, 02:00 AM Reply Like
  • The MY-YAHOO page has been ruined with the the new page.

     

    After advertising for weeks the changes is nothing but chaos.

     

    Maybe Mallissa Mayer should pay attention to this. All who had Yahoo has home page have to give the RSS feed, weather etc., have to move on being abandoned.
    31 Jan, 07:40 PM Reply Like
  • Who is Marissa Mayer?

     

    An Ex Google executive, so she should know the search engine business good enough to dislike the Bing deal.

     

    So ignore all the noises.

     

    BTW who gave Google the search engine job to let Larry Page earn a living?
    31 Jan, 09:39 PM Reply Like
  • Anytime you can take 2% of the market you have to do it.
    31 Jan, 11:15 PM Reply Like
  • I disagree with the folks that say that search is locked up by Google. I think that search is ripe for a major disruption, and I hope it happens, as someone needs to stop the very evil Eric Schmidt in his quest to destroy Apple and generally enslave the world to Google's data aggregation monster. I always thought the key to this is not to imitate Google, but to come up with a new way of doing things, something more personalized, and less aggressive, with an elegant Apple-like interface that limits paid ads and splits the paid/unpaid sections cleanly and vertically. I've been dreaming that APPL would use some of that massive cash hoard to buy Bing and Yahoo and put Marisa in charge of hiring engineers away from Google (who could be a better candidate after all?). I don't see any evidence of this happening and I'm astonished. No moat lasts forever and Google's will fall too, but it's looking more and more like another grim step backward for human development, just like the dreary old Windows monopoly that enslaved enslaved the world to the misery of Windows for 15 years.
    1 Feb, 10:42 AM Reply Like
  • M.Kippenberger - you win this thread.
    1 Feb, 05:07 PM Reply Like
  • Thesis One: too little, too late.

     

    Thesis Two: a dollar short, a day late.

     

    Thesis Three: look!!! A Wookie!!!
    1 Feb, 12:54 PM Reply Like
  • Yahoo should go after the search team employees at Google.

     

    The last few years the Google search has gone downhill and search results are all over the place. But one thing came out of the updates, the large Google ad laden pages are now listed on top. I am pretty sure that these employees would want to create a great search engine, instead of taking distructive marching orders from Page. The search engine was great, fair, and democratic under Eric Schmidt but is spiraling out of control now.

     

    Make them a offer Mayer. Who knows, maybe they know Page is now killing their beloved search engine baby for the quick buck!
    2 Feb, 01:49 AM Reply Like
  • Goog has a 90.3% search share?? Don't they risk being broken up in an anti trust suit? Aren't they a monopoly?
    4 Feb, 01:57 AM Reply Like
  • Google has a communist country style monopoly, also on information quantity and density. The difference being: consumers and governments like communism Google style. It is a terrifying monopoly, destroying many good businesses by the wayside, and nobody can stop them.
    4 Feb, 06:29 AM Reply Like
  • Think this is the plot for a movie, some plight for world domination by Lex Luther
    4 Feb, 08:40 AM Reply Like
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