) recently announced the acquisition of Propeld, a developer of
mobile apps with a social relevance for an undisclosed
Seattle-based, Propeld is the maker of an app called Alike for
) iOS. The app displays location-based information like
restaurants, bookshops and coffee shops around the user and
recommends new places to visit based on his preferences. Thus, it
acquires data from social networking sites such as
) Google+, and recommends nearby restaurants and other places
which might be of interest to its consumers.
Following the acquisition, the Propeld team will be working
with Yahoo's mobile division. The company will shut down
its existing app for the iPhone and other web apps.
Yahoo is marching ahead with its plan to acquire struggling
start-up companies. Its recent purchases include Stamped, a
mobile review app maker; OnTheAir, specializing in broadcasting
video chats or interviews to online audiences; and Snip.it, which
is a kind of clipping service for the web.
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 could help Yahoo get into the
emerging social marketing segment, where its rivals have already
The acquisition of these small start-up companies is a part of
Yahoo's strategy to strengthen its mobile offerings as it has
lost its leadership position in display advertising to Facebook
and Google. With search advertising revenues on a decline not
only because of Google but also Microsoft, Yahoo needs to focus
on other major growth markets and emerging geographies.
In the third quarter of fiscal 2012, Yahoo generated revenues
of $1.20 billion, which were down 1.3% sequentially and 1.2% year
over year. Traffic acquisition cost (TAC) was down 17.7%
sequentially and 22.2% from last year. Excluding these costs in
all periods, net revenue was essentially flat on a sequential
basis and up 1.6% from last year, in line with the consensus
Yahoo has a Zacks Rank #3 (Hold).
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