Yahoo's acquisition of Summly this week points the direction for the future of the Internet giant: It's about mobile, sure, but also about personalization. It's also part of a bold plan to swoop in and reclaim the search crown from Google.
Early Monday morning, Yahoo announced it will purchase Summly, a mobile search app developer. As part of the acquisition, Yahoo will be hiring "top" Summly staffers (including Summly's founder, Nick D'Aloisio). The Summly app will cease as we know it -- its functions to be absorbed by Yahoo products.
Some might say that the Summly deal is but the latest -- and, arguably, most obvious -- evidence of Yahoo aggressively placing its eggs in the mobile basket since Marissa Mayer became CEO. Yahoo's first acquisition since Mayer took the reins, Stamped, was a mobile startup. Shortly before then, in an earnings call, Mayer explicitly announced that Yahoo's "top priority is focused, coherent mobile strategy" and that "at some point [Yahoo will] have to be a predominantly mobile company." Yahoo has acquired other mobile app developers since then.
The strategy behind the Summly purchase, however, may be less about mobile and more about personalization. Consider that Stamped was a recommendations platform. Jybe, a startup Yahoo announced its acquisition of a week ago, is another recommendation app that personalizes suggestions based upon aggregated content from users' social profiles.
It's a Metaphor
This weird-looking bird symbolizes Yahoo swooping in to steal search leadership from Google.
Summly, moreover, is a search tool that finds and returns only the most relevant content. Its technology works in a completely different way than traditional search engines, using sentiment analysis, specialty language processing algorithms, and machine learning to summarize Web pages. This allows users to easily skim and organize the content they are looking for. The app reportedly works better than any other known algorithm for summarizing content. As I've written here before, Summly poses a direct threat to Google. (Indeed, D'Aloisio had the idea for Summly when he became frustrated with Google's inefficiencies.)
With targeted acquisitions of companies whose collective purpose has been some form of relevant content search and delivery, Yahoo's real goals, from this perspective, seem lofty -- to unseat Google and regain the title of king of search, delivering a personalized web to its users.
Mobile monetization has troubled the tech giants for some time. Yahoo is wise to aggressively address the problem head-on. One may wonder, however, if Yahoo is taking the best tack.
Yahoo originally lost its market domination to Google because it became an old company that stopped innovating while Google was a young, nimble startup full of innovation. Today, Google continues to innovate all over the place (even if we don't always like what they come up with), enjoying a rich skunkworks culture. Meanwhile, Yahoo seems to be almost entirely acquisition-focused at present. (The company's latest and greatest innovation? Forbidding employees from telecommuting.) Yahoo's strategy paints a picture of letting outsiders do the innovating -- only to then swoop in with millions of dollars to ride along on their coattails. (The punchline to the Jybe acquisition? It was founded by ex-Yahoo employees.)
There's nothing wrong with acquisitions, of course. The Summly acquisition is a terrific (perhaps even necessary) move. Still, Yahoo itself needs to clearly demonstrate that it is a company capable of strong innovation in its own right -- and not a place where innovation goes to die.
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