Yahoo Shouldn’t Be So Quick to Turn Away From Local

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Marissa Mayer delivered her first earnings report this week. Wall Street analysts liked the messenger enough to ignore the message that Yahoo continued to sputter in the earnings and revenues department.  What was interesting to us at Street Fight, however, was an omission of the local business angle. More on that in a second.

Mayer definitely passed her first performance with flying colors. The supermom and former head of Google’s home page became Yahoo’s CEO to much ballyhoo a few months ago. Her task is daunting: turning around a Web brand that has stopped growing and is losing relevance. Yahoo remains synonymous with big online portals and the age when aggregated links and human-powered directories ruled the ‘net. The company remains one of the most trafficked websites in the world, but the value of that traffic has slipped.

I offered Mayer some advice on local strategy for Yahoo a few months ago (she didn’t reply — no surprise there). In this first earnings call, she sounded as if she had deprecated local initiatives to second-class status in the Yahoo turnaround effort. I think this is understandable. First she needs to fix their core businesses, rationalize the headcount, and better understand all the assets at her disposal. Yahoo has also suffered an engineering talent-bleed that could crimp new initiatives.

But local offers Yahoo one of the few great markets where no obvious winner has emerged. Yes, Google owns Maps, Android and local search. Meanwhile, Apple is moving to lock up the mobile local search segment (including voice recognition with Siri). But neither has really owns local content yet. And with the growth of mobile ads coming on strong ($8 billion for Google in this year, Facebook much lower but growing quickly) its clear that getting into mobile will be one of the ways that Yahoo can return to growth.

Not that this will be easy. Everyone with a smartphone has app fatigue and its hard to go from download to regular use. But a number of the most popular iPhone and Android apps point the way. MLB’s paid app was downloaded 2 million times and is regularly used — so sports sells. Many of the most popular apps, such as FoodSpotting, Yelp, and UrbanSpoon, are driven by food — so food, too, drives traffic. Newspapers are still dying and hyperlocal news is filling in the gap — so hyperlocal news drives traffic in microspheres.

Oddly, the future of Yahoo may be as a… portal. Not a dumb listing of links, but a collection of everything that a user may need at the local level in terms of content, curated and collected and delivered up in a nice, digestible package that is customized to the user’s needs. In fact, on tablets, the modern-day equivalent of portals are going great guns. Flipboard is, essentially, a socially curated portal (and a great one, at that). Yahoo went into the news reader game, too, but with less of a strong social angle. How will Yahoo better monetize? I’ll cover that in the next column.

Alex Salkever is an executive at a cloud computing company and a former technology editor of The views expressed in his column are his own and not those of his employer. His Personal Fight column appears every second Wednesday on Street Fight.

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