Home Yahoo: Destroyer Of Startups

Yahoo: Destroyer Of Startups

Another day, another Yahoo acquisition.

Yesterday the search giant swiped up the five-man Vizify team, a data visualization startup that turns your social media posts into interactive infographics and videos.

It is unclear how much Yahoo paid for Vizify and how the team will fit into the company’s overall strategy—which, for the moment, seems completely random.

But this is par for the course at Yahoo. The company has been picking off startups to cobble together a younger, hipper team since CEO Marissa Mayer took the helm in July 2012. 

In the first two months of 2014, Mayer’s company acquired eight companies, including Aviate, an “intelligent homescreen” for your mobile device; Incredible Labs, the makers of the mobile assistant app Donna; Sparq, a mobile marketing firm; and Tomfoolery, an enterprise application studio. 

Killing Products For Little Production

Yahoo may be acquiring new energy for its company, but it also keeps shutting down the products it buys. Under Mayer, 31 of 38 acquired startups have closed their services.  

People using Vizify will be left out in the cold as the company plans to sunset all its products. The startup is issuing complete refunds and providing a step-by-step process on its website to make the breakup easier.

See also: Yahoo Is Testing Ads Which Sell You On Apps

Sparq’s customers are suffering, too. One of the startup’s services was providing QR codes for businesses, many of which were likely printed onto marketing materials that may still be in circulation. Those QR codes, unfortunately, are now null and void—printed ads turned into garbage thanks to Yahoo’s acquisition. 

And Donna, the popular virtual assistant, ceased to exist one month after Yahoo’s acquihire

The teen-led Summly is just now bearing the fruit of its acquisition last March; Yahoo is implementing the news reader technology into Yahoo News Digest. The former reincarnation of Summly’s pairing with Yahoo was littered with viral trash, a flagship app that was never quite successful.

The bottom line: if a startup wants its product or service to survive, it should probably run if Yahoo calls.

Attracting The Young Guns

Since startups folded into Yahoo tend to shut down, consumers are often left high and dry, and startup founders are left without the product or service they created. 

See also: Buying Tumblr Will Leave Yahoo With The Same Old Identity Crisis

With a million dollars here and a billion dollars there, startups are brought in to an enterprise environment—one that while trying to attract younger talent still carries the corporate albatross around its neck.

The tides may be changing, however. As Quartz notes, Yahoo thinks its old tech behemoth image may no longer be accurate. Yahoo’s chief financial officer Ken Goldman spoke at a Morgan Stanley investor conference this week, and said it’s no longer as hard to attract startup talent as it once was.

There’s no question that we lost a number of folks along the way. We lost that because, in some respects, we pushed them out…When we came to the company, and we talked about acquisitions…frankly, companies did not want to be acquired by Yahoo…and for us to even acquire them we would have to pay a ‘Yahoo premium’ because they didn’t want to come here. That’s not the case any more.

A “Mobile” Strategy

Mayer has focused Yahoo on its mobile services, and the numerous acquisitions are a clear nod to that strategy. But how that strategy will pay off remains unclear. 

As Yahoo makes significant strides to become a mobile-first company, its fearless leader is still trying to revive another, older—or shall we say traditional—Yahoo strategy: search. 

Mayer is betting big on contextual search, and Aviate is the most public part of that plan. With Aviate, your mobile phone learns your behaviors and surfaces applications at the right place and the right time—so if you’re on the bus to Sunnyvale, your phone will show you the weather without asking. 

See also: How Yahoo Can Get Its Search Mojo Back From Microsoft

One Yahoo representative told me that Yahoo believes contextual search is the future, and that’s why the company bought Aviate.

“It’s really about learning these patterns and being able to personalize something that goes beyond intuitive,” said the Yahoo rep. 

The marriage of mobile and contextual search is still in its honeymoon phase—there are plenty of big ideas, but relatively few solid executions. If Yahoo does indeed capitalize on bridging its mobile services with contextual search, you can bet it will be a direct result of one of the many companies it has picked up in the last two years—bringing the technology, and recognition that went along with it, in house. 

Image via Hoij on Flickr

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.