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A source of ours met with Yahoo’s corporate development team sometime during the past few months.This source said the team was open about the kinds of startups and companies CEO Marissa Mayer would like to buy.
Here is what they said.
Primarily Yahoo wants to buy small, failed startups with excellent teams for very little money. This is what’s known as the “aqui-hire.”
These days, it’s a common way for big tech companies to hire talented, entrepreneurial people.
Otherwise, Yahoo has a lot of cash available and it’s willing to spend big, but only if the target company meets two criteria. It must:
- Be very strong in mobile.
- Enhance one of Yahoo’s current brands, in particular Yahoo Sports and Yahoo Finance. As an example, this source said that if Turner had not just acquired Bleacher Report for $200 million, it would be the kind of company that Yahoo, under Mayer, would have taken a long look at aquiring.
The mobile requirement makes a ton of sense. Yahoo has a large total audience in mobile because the default iPhone weather app carries its branding. But the data that powers that app is provided by the Weather Channel. And while Yahoo has strong reach and 70+ mobile apps, users don’t spend much time with its product on mobile.
Check out this chart from Goldman Sachs (which we hear is working with Yahoo on strategy):
Another reason why Yahoo needs mobile help is that it depends on traffic to its Webpages from home PCs, and those are being replaced by tablets.