Why did Yahoo's 2Q earnings disappoint? (Part 5 of 8)
Yahoo’s mobile advertising space
In the prior parts of the series, we discussed Yahoo’s (YHOO) display and search advertising business. Yahoo has been slow in growing its mobile advertising business, although it claims that by the year end it will start getting more traffic from mobile than desktop. Although Yahoo has managed to grow its mobile monthly active users from 200 million in 2Q12 to 450 million in 2Q14, it still lags behind Facebook (FB), which has more than one billion mobile monthly active users.
Yahoo is absent from the list of the top six players in the mobile advertising market
Yahoo has failed to monetize its mobile advertising business. It isn’t among the top six players in the mobile advertising market. According to a report from eMarketer and as the previous chart shows, Google (GOOGL) leads the mobile advertising market in terms of revenues with a share of ~50%. Facebook (FB), Twitter (TWTR), and Pandora (or P) are some of the other players in this market. Facebook continues to grow its mobile advertising revenues at a fast rate. Not having Yahoo in the top six is a worrying sign for the company.
Yahoo trying to increase user engagement on mobile
During the second quarter earnings announcement, Yahoo’s management mentioned that its new email application (or app) has drawn a lot of attention among users. Yahoo claimed that it has added one minute of time spent per user per day on Apple (AAPL) iOS app, while the page views have increased by 70% compared to the previous mail app. On the Android platform, it has seen time spent per user increase by 65%.
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