good evening guysss now im sharing about yahoo On a fast break, Yahoo throws a curve ball Today, bloggers are singing a new playground song: Microsoft (NASDAQ:MSFT) and Yahoo (NASDAQ:YHOO) sitting in a tree. S-E-A-R-C-H-I-N-G. First comes Bing, then comes Marissa, then Yahoo uses its own technol-o-gy. Rosy cheeked bloggers are giggling about supposed rumors from Yahoo insiders that the company intends to change the way it does search. Currently Yahoo uses Microsofts Bing search technology, but notes passed around the classroom read that Yahoo fully intends to use its own in the near future. Good rumors always spawn more questions: Is Yahoo in puppy love with its own search engine, or simply playing games to increase Microsofts affection? In IT Blogwatch, bloggers are Googling for answers. Filling in for our humble blogwatcher Richi Jennings, is a humbler Stephen Glass keys. Yahoo to focus on search -- and Google CEO Mayer says Yahoo plans to invest in improving its search technology, while maintaining its Microsoft partnership Yahoo CEO Marissa Mayer says the company plans on a big comeback in the Internet search business, which means directly taking on industry giant Google. Marissa Mayer Yahoo CEO Marissa Mayer at the World Economic Forum in Davos, Switzerland last week. (Photo: Pascal Lauener/Reuters) Mayer, named CEO of a struggling Yahoo last July, faces a daunting double task of rehabilitating Yahoos search business while taking on a company -- her former employer -- that has so far withstood all search adversaries, analysts say. If Yahoo is to be a powerhouse in search again, they need to do something bold and unique to steal some limelight from Google, said Zeus Kerravala, an analyst at ZK Research. But Im not sure they know [how]. Im not saying they dont have a shot, but its slim. Mayer outlined her Internet search and other plans during Yahoos fourth-quarter earnings call on Monday. The CEO said Yahoo will focus building technology that can improve search results and on building the companys share of desktop and mobile device users. Search, Yahoo Mail and the Yahoo homepage, are in the most need of work if Yahoos goals are to be met, she added. Theres a lot more potential here, Mayer said. Overall, search is a key area of investment for us. All the innovations in search are going to happen at the user interface level going forward. We need to invest in those features, both for desktop and mobile [devices]. I think both ultimately will be key plays for us. She did note that overhauling the Yahoo search business doesnt mean that the company must ditch its partnership with Microsoft. The 2010 deal calls for Microsofts Bing search engine to power Yahoo Web sites. With the deal, Yahoo essentially tossed out its own search engine in favor of Bing. At the time, analysts viewed the partnership as a joint effort to chip away at rival Googles broad search success. Three years later, Google remains dominant while Yahoos market share has slipped. Mayer, a high-profile executive at Google before leaving to lead Yahoo, still hopes the Microsoft partnership can help improve the companys share of the Internet search market. Were really excited and happy to work with Microsoft, she said. Our teams are working incredibly well together. Overall we have a big investment we want to make and a big push in search. Weve lost some share and want to regain that. Analysts say the task will be a difficult one for Mayer and Yahoo. I think its going to be difficult for Yahoo, even with Microsoft, to match Google, said Brad Shimmin, an analyst with Current Analysis. The question is should they [try to] and can they compete with Google? Yahoo was at one time a very strong player in the search business. The problem for Yahoo is that those days are gone and Google is now the leader by a wide margin. Kerravala noted that Yahoo would need a major slip up from Google to create an opening in the search business. Yahoo would have to see something that Google misses, he said. Google is on top of search, thats been proven over the years. he added. Given [Yahoos] history, I dont think shes thinking too big, Shimmin said. In the past, Yahoo was very much a powerhouse in the search market. Time has passed, though, and Google has built on its success, so it will be difficult for Yahoo to achieve what it once had, he added. Yahoo reports another sales decline as ads sag CEO Marissa Mayer cited the companys investments as laying a foundation for revenue growth Yahoo reported a 6 percent drop in revenue for the fourth quarter as sales of its display and search ads dropped compared to last year. Revenue for the quarter ended Dec. 31, 2013, was $1.266 billion, down 6 percent compared to the same period the previous year, Yahoo said Tuesday. Excluding traffic acquisition costs, revenue was down 2 percent, though in line with the expectations of analysts polled by Thomson Reuters. Yahoos net earnings for the quarter rose by 28 percent to $348 million, including a $49 million net gain from the sale of patents. GAAP earnings per share were $0.33. For the full year, Yahoos total sales also dropped by 6 percent to $4.68 billion, the company reported. Yahoos net earnings for 2013 were $1.366 billion, a 65 percent drop compared to 2012, when Yahoo reaped big rewards from selling a chunk of its shares in Asian e-commerce giant Alibaba. Yahoo has struggled in recent years to grow its digital ad sales while competitors like Google and Facebook have made gains in those areas. Since Marissa Mayer took the helm as CEO in 2012, she has aimed to make Yahoo cool again with a string of redesigns, acquisitions and some high-profile hires like TV personality Katie Couric. Some of those moves, like Yahoos acquisition of Tumblr, may have netted the company more users and more developer talent, but not yet an upswing in advertising sales. Yahoos investments and its products, which now include revamped versions of Flickr and Yahoo Mail, have helped to establish a strong foundation for revenue growth, Mayer said Tuesday in the companys earnings announcement. Im encouraged by Yahoos performance in Q4 and 2013 overall, she said. But for the fourth quarter, Yahoos performance in the area of digital advertising was not stellar. While the Internet company reported some increases in the number of ads sold, the money Yahoo generated from those products dropped. In display, the number of ads sold increased by roughly 3 percent (excluding Korea, where Yahoo shuttered its business at the end of 2012), but display ad revenue dropped by 6 percent to $553 million, Yahoo reported. Over the past year Yahoo has tried to energize its advertising business, partly by introducing native ads to some of its properties. Meanwhile, Yahoo also reported a 17 percent increase in paid clicks in search ads, excluding Korea. The price per click, however, dropped by about 3 percent (excluding Korea), while search ad revenue also fell by 4 percent. Shares of Yahoo stock were trading at $38.22 after the market close on Tuesday, up slightly from closing at $36.65 on Monday. One way Yahoo has sought to attract users, and ultimately boost ad sales, is by revamping its mobile properties. That approach seems to be working to add users. During a webcast to discuss the results, Mayer said in the fourth quarter the company increased its monthly users on mobile to roughly 400 million. That represented approximately half of Yahoos overall network of 800 million users, she said. Yahoo also nearly doubled its revenue from mobile products last year, Mayer said, although she noted that the amount was still not material to the companys business. In 2013 Yahoo released new versions of its sports, finance and weather mobile apps, among others. Over the next year, the company plans to figure out ways to better monetize those sorts of products. Stream ads, which are designed to blend into users regular content streams, are a primary driver of revenue on mobile, Mayer said. Yahoo also seeks to make more money from social networking, where it is a bigger player now as the owner of Tumblr. The blogging site began placing sponsored content into users feeds this past April. The revenue Tumblr generated in the latter half of 2013 was not material to Yahoos total sales, Yahoos chief financial officer, Ken Goldman, said during the earnings call. However, we are hopeful that in 2014, it will be an important element in our revenue, Goldman said. Report: Yahoo may be developing its own search engine (again) Report: Yahoo may be developing its own search engine (again) In an effort to wiggle free of its pre-existing search agreement with Microsoft, Yahoo is fast-tracking an effort to develop search technology, according to a report. Recode.net reported Friday that Yahoo has launched two projects, “Fast Break” and “Curveball,” with an eye toward—eventually—developing a search engine, the site reported. But the timing is extremely aggressive: just three to four months to build out the programs, the site reported. What Curveball and Fast Break are isnt known. But whats been much more obvious is how Yahoo has chafed under the terms of its contract with Microsoft. Under a 2009 search agreement that began in February 2010, Microsoft guaranteed Yahoo a certain amount of revenue per search on its properties for 18 months. That was compensation for Yahoos exiting search and signing a deal for its sites to be powered by Microsofts Bing search technology. However, Microsoft then fell almost continually short of its obligations under the deal, prompting Yahoo executives to note, in earnings report after earnings report, that Microsoft wasn’t meeting its commitment. In April of last year, Yahoo and Microsoft agreed to a one-year extension of the deal, but only in the United States. That deal would expire on April 1, 2014—about the time that “Fast Break” and “Curveball” would be scheduled to be completed. And as for Yahoo’s thoughts on search? This week, Yahoo’s Mayer was asked about reviving either its own internal search program, or resurrecting “Panama,” a 2006 ad program designed to more accurately weight paid ads on a number of characteristics, rather than just on advertiser bids. “Overall in terms of search, we completed the transition this past quarter of our Panama platform so and by in large part it is now been shut down,” Mayer said during a call in conjunction with Yahoo’s fourth-quarter earnings. “As we mentioned in the previous question, search is very strategic for us. We’re long in search and we do intend to continue to invest in the search user experience and in really making sure that Yahoo users on the network ultimately, really gather tremendous experience.” Is Yahoo developing a full-fledged search engine? The aggressive timing of the programs would seem to argue against it. Yahoo’s search strategy, since the Bing transition, has been to encourage users to “search” by showing them articles and other topics related to what they’ve viewed before. It does make sense to monetize ads by leveraging what Yahoo knows about a given users searches to show more related content. In any event, it looks like Yahoo will show off its next-generation search strategy near or at the end of March. With “Fast Break” and “Curveball,” Mayer Is Aiming to Bring Back Search Tech to Yahoo According to numerous sources inside Yahoo, CEO Marissa Mayer has ordered up two under-the-radar initiatives — well, not to me and now you! — that could potentially get the company back into algorithmic search as well as search advertising. The internal code names for the efforts — which are not actually being done together, though they are in tandem — are borrowed from sports. In this case, basketball and baseball: Projects Fast Break and Curveball, respectively. Sources said the plan is being done as part of a contemplation of how Yahoo can accelerate the end of — or actually end — its longterm search and advertising partnership with Microsoft. Currently, Yahoo only has control over the search experience, but Mayer clearly wants more purview over the business. Fast Break and Curveball involve a number of top Yahoo execs, including Laurie Mann, SVP of search products; Adam Cahan, SVP of mobile and emerging products; and Jay Rossiter, SVP of platforms. (If SVP of ad tech Scott Burke shows, it’s a party — not a fun one exactly, but it is what it is in Sunnyvale these days). Sources said Mayer has put a priority on the projects — a three- to four-month time frame — which could eventually result in a full search engine, possibly more oriented to mobile than the desktop, where Yahoo once played big. That makes sense, especially since Yahoo’s share of search has continued to decline. Most recently, according to comScore, it fell to 10.8 percent, down 0.4 percent from November to December in the U.S. market. Meanwhile, Google’s share rose to 67.3 percent and Microsoft to 18.2 percent. It has been thus since former CEO Carol Bartz got Yahoo out of the search technology business in 2009, in favor of the Microsoft deal that was called the Yahoo & Microsoft Search Alliance. Under the 10-year agreement, Microsoft’s Bing search engine provides the search technology on Yahoo, as well as the search-advertising technology. It also includes revenue-per-search guarantees, the latest of which is set to expire in March (it could be renewed as before). The income from search has become important to Yahoo, which said in a recent regulatory filing that 31 percent of its revenue came from its search deal, much higher than had previously been thought by investors. That puts Yahoo in a vulnerable position in terms of controlling its destiny, and it has been an issue with Mayer for a while, who has tried various legal means to exit some of its search commitments with Microsoft. For example, Yahoo tried and failed to delay the transition of paid search in Taiwan and Hong Kong, via complex legal fighting. As I noted in a post in November about the issue: “In other words, despite leaking all over the place that CEO Marissa Mayer wanted to get out of the search partnership with Microsoft (and she still might want to), Yahoo’s not getting out of the rollout globally. Yet!“ Yet, indeed, Mayer has made no secret internally of her disdain for the deal, despite public utterances supporting it. In its legal efforts, by the way, Yahoo used the excuse of the Microsoft CEO transition as one of its arguments for the delay. That will soon be fixed, as longtime Microsoft exec Satya Nadella is likely to be taking that job soon. Interestingly, thanks to a stint at Microsoft’s Online Services division at the time of the initial Yahoo deal, Nadella is very familiar with it and should be able to go toe-to-toe with Mayer, who ran search products — though not the technology — at Google. Whether she can slip out of the deal will be interesting, as will any efforts to revive search at Yahoo. It has lost a lot of its core team in the area. Here Mayer has tried to bulk up, as well as with its research efforts. By the way, since I am sports-deficient, Wikipedia tells me that a fast break is an offensive strategy in basketball: “In a fast break, a team attempts to move the ball up court and into scoring position as quickly as possible, so that the defense is outnumbered and does not have time to set up.” It is also apparently a Reese’s candy bar (“peanut butter and soft nougat covered in deliciously rich milk chocolate”). A curveball — I do know this one — is a spinny pitch. So, let the games begin. How Yahoo Can Get Its Search Mojo Back From Microsoft Yahoo is reportedly ready to dump its Bing search deal. But to get a second chance at search, it must court developers. Yahoo reportedly wants out of a deal that ties its search services to Microsoft, and is preparing new technological initiatives to reclaim its position in the search market. According to Kara Swisher at Re/code, Yahoo CEO Marissa Mayer is pushing two new initiatives called “Fast Break” and “Curveball” that could position Yahoo once again as a player in Web search and the lucrative search-advertising market that accompanies it. Yet its not clear how merely taking back control of its own search product will help Yahoo turn around its shrinking market share. Searching For Developers Yahoo faces a thorny legal problem in extracting itself from a multiyear contract with Microsoft. It also has a challenge in rebuilding its search team, where it has lost much of the talent it built up over the years competing with Google. Mayer, who has focused on rebuilding Yahoo’s engineering ranks since joining the company in 2012, could likely solve these problems. But its far from clear how she will then get consumers, long used to Googling everything, to switch to Yahoo. Yahoo handed its search infrastructure over to Microsoft in 2009, with Microsoft also selling search advertising on both Yahoo and its own Bing search engine. Sources told Swisher that the two projects, once completed, would result in a full search engine oriented to mobile. Google dominates desktop Web search, so consumers don’t have a compelling reason to switch to Yahoo’s services. Yahoo could change that by building services that appeal to mobile developers, who would in turn have a financial interest in promoting a new Yahoo mobile search. At the Consumer Electronics Show in January, Mayer announced the acquisition of Aviate, an “intelligent homescreen” startup. On Android phones, Aviate rearranges the apps that appear on the home screen of a phone based on your usage patterns. For instance, if you get up everyday at 6 a.m. and check the weather, your mobile device will learn that behavior and start showing you Yahoo Weather right when you wake up. While that could obviously benefit Yahoos own portfolio of news, sports, and stocks apps, Aviates technology could also help developers boost usage of their own apps. The Right App At The Right Time To further capture the interest of developers, Yahoo could let users search for information across their existing apps. If those searches come up empty, Yahoo could prompt users to download new apps. (Such app-download advertising is part of what’s driving Facebook’s success in mobile.) Last September, Mayer said that Yahoo is focusing on the company’s mobile services, and if the recent acquisitions and mobile push are any indication, shes been staying the course on that vision. Yahoo has some assets it could leverage in this push, like Boss, Yahoo’s search API. Boss let developers build search products on top of Yahoos search technology. But its clear that Boss hasn’t gotten much attention recently. Yahoo will face stiff competition. Google recently overhauled Android to make it easier to search within apps and link directly to specific sections within an app. This is actually a technology Yahoo could leverage within its own app search, but it will have to outmaneuver Google on its own turf. Facebook, too, is overhauling its Graph Search engine for mobile, and already knows a lot about the way people use Facebook-linked mobile apps. But Mayer, who led search at Google during its inexorable rise, knows what it’s like to take on entrenched competition. The alternative is the status quo—shrinking market share and a Microsoft deal that binds her hands. Yahoo reportedly returning to roots in search tech The Web giant will shift some of its focus back on algorithmic search and search advertising with the help of two new initiatives, reports Recode. Yahoo may be cooking up something new in search technology, according to a report on Friday. Recodes Kara Swisher says that the tech giant has ordered up two new search-related initiatives, codenamed Fast Break and Curveball. Details are still scant about the specifics of each project, but they will reportedly bring the company back to some of the nitty-gritty of taking queries -- algorithmic search and search advertising. The projects are reportedly priorities for the company, both with three-to-four month time frames, and involving some of the companys bigwigs: search chief Laurie Mann, mobile head Adam Cahan, and SVP of platforms Jay Rossiter. Cahans involvement indicates a strong mobile bent, which is not surprising since Yahoo has been beating the mobile drum loudly under CEO Marissa Mayer. Currently, Yahoo is steeped in a 10-year deal with Microsoft, in which the back end of its search operations is powered by Bing, while Yahoo still controls the user experience. But the deal has some built in outs for each company, based on revenue and performance expectations. Though the deal brings in a not-insignificant 31 percent of revenue for Yahoo, Mayer has shown her disapproval of the deal. As of yet, Yahoo hasnt been able to break away from it. CNET reported in December on the future of Yahoos search strategies, and Fast Break and Curveball could be the eventual fruits of that work. In our piece, we also wondered if a new rejuvenation in search technology could mean that the company was actively preparing for life after Bing. It now looks that that could be the case. We wrote: That Yahoo is making a play in structured search could mean that something is afoot. One former engineer at Yahoo said one of the reasons the company shut down SearchMonkey was because Bing had a similar program. Some theories: The company could be planning a Bing exit strategy for 2015 or earlier, and look to partner with another Web crawler, aka Google. Some reports have said Mayer has been cozying up to her former company on that front. Or Yahoo could be rebuilding its own core search capabilities, though thats the unlikeliest of scenarios because that would be a nightmare for the companys margins. Or Yahoo could even be beefing up its team just enough to gain more authority within the Bing partnership, in case it wanted to advise Bing on what to do on the back end. Yahoo Could Do Search Because It Needs The Money Yahoo could be getting back into the search game. Its long-suffering deal with Microsoft has underperformed, making recent revelations that the company is working on building new search products hardly surprising. If the projects are serious — meaning they are more than experiments or attempts at leverage for the coming discussion it will have with Microsoft on per-search revenue — Yahoo could be working to create a product that will replace nearly one-third of its current revenue. In its calendar third quarter of last year, Yahoo earned 31 percent of its total revenue from the search deal with Microsoft. As a percentage of its revenue, the Bing search deal is of growing importance to Yahoo. For the nine months ending last September 30, 30 percent of the company’s revenue came from the deal, or slightly less over the nine-quarter period than the last quarter reported. More dramatically, its 2012 third quarter — comparable to the 31 percent number — saw 27 percent of its revenue come from the Microsoft deal. And in the nine-month period ending with the third quarter of 2012, Yahoo earned a more modest 24 percent of its top line from Microsoft. So, 24 to 27 to 30 to 31 percent. That’s a steady progression. What is driving that momentum, given that Yahoo is consistently losing search market share? I’d estimate that its other revenues, which are declining, are doing so more quickly than income from the Microsoft deal. Recall that Microsoft last year re-upped its revenue guarantee with Yahoo in regards to its search agreement for the U.S. Financially, therefore, the Microsoft deal is something of a boon for Yahoo, providing revenue stability in a time of transition for the latter company. That’s the nice way to put it. In reality, Yahoo needs that firehose of Redmond dollars to cover for it as it uses future Alibaba money to (hopefully) buy revenue momentum. So far that isn’t working, as we recently saw. And Yahoo may be working to cut this income flow and forge a new path for itself. You could call that bold. But there is a fine line between boldness and overzealousness (leadership, you could argue, lies in between). Microsoft and Yahoo both declined to comment for this story. While that may be the case, it’s worth keeping in mind that Yahoo has old search chops, Mayer is brilliant, and the company is on a decent personnel footing. It could pull off a transition back to search. And, perhaps, Yahoo could deploy enough of that Alibaba cash to snag a few Googlers to pull the operation together. Yahoo was said to complain last year that revenue per search was actually worse with Microsoft under the agreement than it had been when the company used its own technology. That’s a point in favor of Yahoo trying again. The company may be able to opt out of the deal in mid 2015. But search, as the saying goes, is hard. Microsoft, a company with a few good heads in it, has spent years — and billions — building Bing. And despite that work and treasure, Bing has yet to mature to the point in which Yahoo and Microsoft didn’t need the search revenue guarantee. That means that Bing was monetizing at below the set threshold, forcing Microsoft to fork over more cash to keep Sunnyvale on board. So, after billions and years, Microsoft’s search technology still isn’t so good at making money. For Yahoo, that’s the mission at the moment. It needs to grow its revenue. And, at this precise moment, it appears that the company is moving instead to replace a stable, and likely renewable revenue stream.
Posted on: Mon, 03 Feb 2014 14:19:29 +0000
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