Yahoo’s New Strategy

This week when Yahoo! bought Summly, a news gathering app by 17-year-old Nick D’Aloisio, many said the $30 million acquisition was nothing more than a PR stunt.

But those people are failing to see the big picture for Marissa Mayer’s initial shift in strategy. It’s not even about mobile specifically, though Mayer has hired 120 new mobile developers and her acquisition spree has largely targeted mobile companies.

Yahoo-buys-Summly-news-app-for-30m-500x500Fast Company runs down the list of those acquisitions:

  • Stamped: Acquired in October 2012, is a mobile app that keeps track of restaurants, books, movies, and anything else users liked.
  • Acquired in January, clips and shares news articles in a Pinterest-like format.
  • Alike: Acquired in February, makes restaurant recommendations based on users’ previous preferences.
  • Jybe: Acquired in March, recommends movies, books, and restaurants based on data contained in social networks.
  • Summly: Acquired this week, a news algorithm to surface and summarize news most relevant to each user.

It’s building an interest graph for its users. Or at least acquiring the technology necessary to do so. And they building that personalization and engagement loop on the back of the computing device you carry around all the time in your pocket. Mobile is just an avenue for a larger strategy.

As Sarah Kessler notes: “It’s a loop: Increasing engagement increases personalization. Increasing personalization increases engagement. But to pull it off, Yahoo needs to focus on defining interests and providing users content that fits theirs perfectly–and that’s the thread that runs through its acquisitions.”

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