Will Mobile Drive Growth For Yahoo?

Yahoo EVP Hilary Schneider told the Reuters Global Media Summit in New York that Yahoo was seeing “incredible . . . extraordinary” growth in mobile (she means usage primarily). The company, by several metrics, is one of the largest in mobile. It operates one of the top three mobile ad networks in the US and enjoys a massive global, mobile footprint. But the question is: will Yahoo be able to keep up in mobile over time?

Among the big internet companies Yahoo has been the leader in mobile advertising to date. However Google recently bought both AdMob (in a highly publicized announcement) and Teracent (in a less publicized one). Both companies’ assets combined offer a range of powerful capabilities in mobile display advertising, including generating dynamic creative elements to take advantage of location, demographics, behavior and context, on the fly. This kind of approach is critical to realize the promise of LBS, as well as mobile display advertising more generally.

Google also already dominates the traditional form of mobile search (if I can use “traditional” and “mobile” in the same sentence).

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For all the big players, including Facebook, mobile has quickly become strategic. Earlier this week Bing rolled out a rich mobile app (with voice search) for Windows Mobile and is reportedly working on one for the iPhone. Furthermore, Microsoft’s advertising partnership with Verizon gives it privileged access to the nation’s largest carrier’s audience — although not on Android devices in the same way. Recognizing the strategic value of mobile, Microsoft is sure to spend handsomely on it over the course of the next 3-5 years at the very least. Indeed, the Google vs. Microsoft battle will increasingly play out in a mobile context:

  • Android vs. Windows Mobile
  • Google vs. Bing mobile search
  • Mobile display advertising
  • Mobile company acquisitions

Yahoo’s mobile homepage and mobile search are very strong. In some ways Yahoo is more competitive in mobile search than it is on the PC, where its share appears to be eroding somewhat in favor of Bing. As part of the larger Yahoo-Microsoft search deal, Yahoo mobile will use the Bing back end to power search results on mobile devices as well as on the PC.

Recently Yahoo made mobile chief David Ko in charge of “audiences” in North America, reporting to Hilary Schneider. The company also put mobile product development under CTO Ari Balogh. This is a wise and key move for Yahoo, which must continue to innovate around mobile products and the user experience to remain competitive over time. The PC and mobile are more and more linked for smartphone users. But will the company invest the engineering resources and have the stomach for the spending battle over mobile startups that is sure to ensue?

Yahoo would certainly answer yes to these questions, but it exited search — or partially did — to save money on R&D. Yahoo at one time had the leading local search and most innovative mapping property online; however it failed to keep investing in both (although Yahoo would dispute that) and ceded leadership to Google in both arenas. Let’s hope that doesn’t happen in mobile.

A heathly and successful Yahoo is good for the advertising ecosystem, good for consumers and good for competition — which we all want to see.

Related Topics: Channel: Mobile | Features: Analysis | Google: Mobile | Microsoft & Yahoo Search Deal | Yahoo: Mobile & Go

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About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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