OPA Intelligence Reports

Posted in News on 07/28/2014 By Mark Glaser and Angela Washeck

Yahoo snaps up Flurry in mobile push

If “The Graduate” were filmed in 2014, the one word Mr. McGuire would say to Ben would be: mobile. Are you listening? Obviously Marissa Mayer and Yahoo are, as they snapped up the mobile ad exchange Flurry. The network is best known for being a leader in gleaning data on mobile app users, an invaluable asset to tech and publishing companies serving targeted mobile ads. More importantly, Flurry is one of the largest acquisitions under Mayer’s watch and may be just what Yahoo needs to compete with big players in the mobile ad space such as Facebook and Google. Analysts told WSJ’s Mike Shields that Yahoo’s aim with Flurry is to “create a super-robust mobile ad targeting offering, and it could use that data combo to deliver mobile ads on its own apps, Flurry’s existing app clients, and a slew of other apps.” But even as the company has experimented with digital magazine-like verticals, launched its News Digest app, dabbled in original TV series production and benefited from the Alibaba buy, Yahoo still isn’t seeing impressive results. Second-quarter earnings showed a 4 percent decrease in revenues year-over-year and an 8 percent dip in display revenue. Shields noted that Yahoo didn’t even mention mobile ad revenues in its most recent earnings call – not a good sign.

So the timing is right for Yahoo to snap up Flurry. Wrote AdAge’s Tim Peterson, “Having ceded its desktop display advertising dominance to Google and Facebook, Yahoo could use Flurry to try to keep up with its usurpers in mobile” and could soon be reporting significant mobile revenues. At the same time, much of the mobile web’s strength lies within apps – whether through interstitial video ads or app-install ads, according to Digitas’ Chia Chen, whom Shields interviewed. Yahoo just doesn’t have much to offer in the way of mobile apps or mobile cash flow, despite Mayer’s proclamations that Yahoo is committed to being a mobile-first company. Still, the New York Times’ Vindu Goel reported that more than half of Yahoo’s monthly users come from mobile. For now, Facebook and Google comprise two-thirds of the mobile ad market, though Twitter’s team-up with MoPub gives them a small foothold. But VentureBeat’s Richard Byrne Reilly says Yahoo is a latecomer to realizing mobile’s impending dominance. “Yes, incorporating Flurry’s knowledge base into Yahoo’s mobile strategy is a good start. But Yahoo will likely take a year or more to get its mobile game to the level of Google, Facebook, and even Twitter — if ever,” he wrote. Fast Company’s Mark Wilson has a different perspective on the Flurry purchase. Given Flurry’s huge user base in China, Yahoo stands to gain, especially since Facebook is blocked there. “With the Flurry acquisition, Yahoo isn’t just making a run at the mobile market. It’s making a run at China’s mobile market,” Wilson wrote.