Why Yahoo! is becoming a force to be reckoned with

It’s only been a year since Marissa Mayer decided to take on the foreboding role as CEO of Yahoo!, the site that was once considered a lost cause compared to the cooler and hipper kids on the block: Facebook, Twitter and Pinterest.

But Mayer, as one of very few women CEOs out there, made the headlines of virtually every publication as soon as the announcement was made. And she hasn’t stopped since then.

In an effort to make Yahoo! a more unified community, Mayer instated a ban against Yahoo! employees working at home, which received mixed reviews. Mothers, for one, criticized Mayer for being insensitive, especially to those who are pregnant or who have just given birth.

But a couple of months later, Mayer announced that she would extend maternity leave by eight whole weeks, a move that helped redeem her reputation among previously miffed mothers.

Then Mayer decided to go on an acquisition spree, scooping up startups left and right. Within 10 months, she picked up 11 companies, most notably Tumblr for a cool $1.1 billion dollars. Her other acquisitions include Astrid, GoPollGo and the brainchild of 17-year-old Nick D’Aloisio, Summly.

Though Tumblr may be the last acquisition Mayer makes for a while, unlike her predecessors, she won’t let her purchases rot anytime soon.

Gizmodo recently published an article on Monday, “Flashback: How Yahoo Killed Flickr and Lost the Internet,” a scathing but brutally honest look at why and how Flickr did not takeoff as the premier photo-sharing site it was expected to be.

Much of what Honan says in his article cannot be overlooked — the sloppy integration of Yahoo! logins on Flickr and the poorly-timed release of the Flickr app — and these mistakes should hopefully serve as examples to Yahoo of what not to do in the future.

The downfall of Flickr occurred during former Yahoo! CEO Jerry Yang’s era, so there’s a better chance that Mayer won’t fall into the same pattern of neglecting acquisitions. Just today, Yahoo! unveiled a fresher look for Flickr, an update that just might bring back some of the users it has lost. However, Mayer’s spree mirrors the actions that Yahoo! took years ago, scooping up the promising startups Delicious and Upcoming, the latter which Yahoo! ultimately decided to kill.

There’s also the incredible amount of money that Mayer has been burning through to get what she wants. Summly, for instance, was bought for $30 million — only $3 million less than what Flickr was bought for — and Tumblr was purchased for five times that amount. Though it’s true that Tumblr has the young and active audience that Yahoo has been drooling over for quite some time, the social blogging site has not done a great job of marketing itself as a money-making product, something that Facebook’s Instagram has yet to do.

To put Mayer’s acquisition in another perspective, in 2006, Google bought YouTube for $1.65 billion, an amount that seems like a bargain now considering how successful the video-sharing site is.

Despite these hiccups, Mayer still seems to be on track to do something really great for Yahoo!. Yahoo! has been consistently making the headlines in a positive way, keeping shareholders happy and hopeful. Mayer keeps the public on its toes, holding investors and users in suspense to see what Yahoo! is going to do next.

Also unlike her predecessors, Mayer seems to know what she wants to do with Yahoo! and what improvements she wants to make. With all of the mobile acquisitions she made, it’s no secret that a Yahoo! wants to build a strong mobile presence for itself (Yahoo! launched a very aesthetically-pleasing weather app in April) as well as attract younger users. And Mayer has done what she needs to do to so far to achieve these goals.

But despite all of these bold acquisitions and rebranding efforts, something still doesn’t feel right. Mayer has goals and aspirations for the company, but Yahoo! still lacks a solid niche. Google serves as a universal search engine. Facebook is the ultimate platform for sharing content and interacting with friends. Twitter connects people of all backgrounds with short memo-style posts.

But what about Yahoo!? Yahoo! has become a social network-search engine-newswire Frankenstein that doesn’t just do one thing well. In order for Yahoo! to truly have a chance at standing out among its larger, more well-established competitors, a clear vision needs to be established for the company. Mayer promised that she wouldn’t “screw up” Tumblr, so Yahoo! probably won’t be taking over the blogosphere anytime soon (except in the form of ads come 2014).  Perhaps Yahoo! has something big planned for mobile apps. Or maybe Yahoo! will be putting more emphasis on the news and gossip sections of its site, using Summly’s summarization algorithm.

Keep an eye on those headlines.

Update: On Thursday, May 23, Yahoo announced that it acquired California-based gaming startup, PlayerScale.


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