Yahoo got quite a few talking, when on November 20, 2013, the tech major increased its stock buyback by USD 5 billion, returning more cash to shareholders. The company’s plan, to raise up to USD 1.15 billion for funding working capital, strategic transactions and acquisitions, is seen as one of the latest attempts from CEO Marissa Mayer to revive Yahoo’s growth. If Yahoo’s recent stock performance is anything to go buy, the tech giant is getting something right. Noteworthy here is Asia’s contribution to Yahoo.
Not only the buybacks in the last few years but also the performance of Yahoo Japan and Alibaba Group, the Chinese internet company where Yahoo owns a significant stake, can be credited for the strong performance of Yahoo’s shares.
“Yahoo Japan has been going performing very well in the market of late and Alibaba, which has always been a strong company, continues to rule. Courtesy these two, Yahoo stock has been on a rise,” commented an analyst, indicating the company’s healthy presence in Asian markets.
This is despite the fact that Yahoo, for the most part, seems to concentrate significantly on the revival of its US operations. While US is kingpin in Yahoo’s overall play, Asian markets have performed a key role in ensuring that the internet giant stayed relevant in a world, where younger companies have taken over and changed the technology-led media space.
Mobile and the revival plan
In the last year and a half, Yahoo has launched or re-launched nearly 20 products including refreshes of its home page, Yahoo Mail, Flickr and even a redesign activity of Yahoo logo. While CEO Mayer seems to have focussed on the design element of the product significantly, at a recent Dreamforce Conference in San Francisco, she said that the company was looking to hire a design lead who would report directly to Ms Mayer.
“Many had questioned the motivating factor behind Yahoo’s logo redesign, but I see all this as positive steps in its journey to refresh the brand under Marissa’s leadership. It’s no secret Yahoo has been on an aggressive buying spree since she took over as they step up to the challenges of remaining relevant in the modern internet era, where consumers no longer place the same value on internet portals as they did back in the 2000s,” observed Nick Seckold, who was Head of Digital for Mindshare Asia Pacific and then was elevated to be the CEO for Mindshare Singapore, in a conversation with DMA at the time.
In her words, Ms Mayer’s ‘design’ ambitions are geared up towards the company itself. To that effect, she pointed out Yahoo’s endeavours to be a mobile-first company. “We don’t think of ourselves as a design first company but as a mobile first company. When you look at what is happening with the mobile trend in our industry, it is clear that it is a wave large enough for one to ride for reinvention. Yahoo, like many other companies, has to constantly reinvent itself.”
Ms Mayer said that the “scary part of reinvention” was that it happens best with platform shift. “With Yahoo, we want the platform shift to mobile,” she stated. While Yahoo is far behind the likes of Facebook in monetising mobile, under Ms Mayer’s leadership, the company has overhauled its mobile offer. From a team of 60-strong when Ms Mayer took over, of which 30 were core mobile employees and the rest worked within other product teams, Yahoo now has almost 400 members in its mobile team. The platform has almost 400 million monthly unique visitors from mobile devices.
The need for a bigger story
The journey for Yahoo to find its relevant niche however has only just begun. Marketers have some space that they associate a digital platform with – Facebook and mobile, Twitter and conversations or AOL and video – which is not the case with Yahoo yet.
Yahoo has ensured its place in news media with its various initiatives including acquisition of companies such as Tumblr that was not just catering to a younger audience but was also brought a creative element with it. However, Yahoo needs a stronger story now.
Prashant Kumar, President, World Markets-Asia, IPG Mediabrands noted, “Yahoo’s intent for a fresh, new feel is understandable. CEO Marissa Mayer has had a great start but she needs a bigger story than she has had so far. Yahoo! needs to make some audacious acquisitions in the video area.”
For Mr Seckold on the other hand, Yahoo’s greatest challenge is to change people’s perception of the brand and what it stands for. He said, “While Yahoo is still one of the dominant players in the space if you look at audience size as a measure, consumers have evolved in how they access and consume content online which has forced Yahoo to re-think how it goes to market. It is clear that Yahoo is committed to the change agenda and has a laser focus on what its future looks like.”