) recently announced the acquisition of social media web browser
startup, Rockmelt. Financial details of the deal were not
California-based Rockmelt was founded in 2010. Its web browser
incorporates social media features such as Facebook chat, Twitter
notifications and widgetised areas for other content providers
such as YouTube and local newspapers, enabling users to send
Facebook messages and browse Twitter postings.
After CEO Marissa Meyer took over the reins of the company,
Yahoo! has been quite active on the acquisition front. The
Rockmelt acquisition marks Yahoo's 20
acquisition under Marissa Mayer. Yahoo plans to shut down the
existing Rockmelt product by the end of Aug 2013 and integrate
the latter's technology into its own media platform according to
Some of Yahoo's recent acquisitions include Lexity, an
Ecommerce Service for Small Businesses; Ztelic, a social data
analysis startup; Astrid, a task-management app maker; Summly, a
news-condenser app maker; Stamped, a mobile-review app maker;
OnTheAir, which specializes in broadcasting video chats or
interviews to online audiences; Snip.it, which is a kind of
clipping service for the web; Propeld, a location-based apps
maker; Jybe, a social recommendation site; Loki Studios, a mobile
gaming start-up, PlayerScale, a gaming infrastructure company;
photo app maker GhostBird Software; enterprise conference call
service provider, Rondee; mobile app developers, Bignoggins
Production and Qwiki Inc.; an email and address book management
company, Xobni and mobile advertising startup, Admovate.
The acquisitions are part of a strategy to broaden and
strengthen Yahoo!'s expertise in the mobile segment as adoption
of mobile devices such as smartphones and tablets continues to
accelerate. Through these acquisitions, Yahoo wants to offer apps
with new features to attract more users to its website.
Also, with these acquisitions, Yahoo is picking up a whole lot
of engineering talent as well as key technologies and products at
a cheaper rate. These acquisitions can help Yahoo! enter the
social marketing segment, where its rivals have already
We are positive about Yahoo as its business continues to show
signs of improvement, even in the face of tough competition from
). Currently, Yahoo has a huge task at hand, which is to bring
back its users and make them spend more time on its properties.
This would be crucial in bringing back advertisers as well.
In the second quarter of 2013, Yahoo generated revenues of
$1.14 billion, down 0.4% sequentially and 6.8% year over year.
Traffic acquisition cost (TAC) was down 10.8% sequentially and
53.1% from last year. Excluding these costs in all periods, net
revenue was essentially flat (up 0.3% sequentially but down 0.9%
year over year), short of the consensus estimate.
Yahoo shares currently have a Zacks Rank #2 (Buy).
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