Why did Yahoo's 2Q earnings disappoint? (Part 6 of 8)
Yahoo is optimistic about the success of its Aviate and Gemini products
In the previous part of the series, we discussed that although Yahoo (YHOO) has managed to double its mobile monthly active users in the last two years, it still lags behind in the mobile advertising market in terms of revenue share. However, Yahoo is optimistic that its mobile display as well as mobile search business will grow fast enough with the help of products such as Aviate and Gemini.
Yahoo acquired Aviate technology earlier this year. Aviate is a mobile application (or app) available for Android users. It offers intelligent information depending on user’s location and context. It also simplifies the user’s home screen. Yahoo mentioned that it brought Aviate out of beta in late June. Since then, it has got a tremendous response. The number of users increased 2.5x in one week alone. These users interact with Aviate on an average of 50x a day.
Gemini is another platform that combines mobile search and native advertising. It helps advertisers manage and optimize their ads. Yahoo mentioned that Gemini now represents 50% of Yahoo’s U.S. mobile display advertising revenues.
Yahoo trying to become an important player in mobile search market
During the conference call to announce 2Q14 earnings, Yahoo’s management mentioned that its mobile display and mobile search revenue each grew by more than 100% year-over-year (or YoY). However, Yahoo isn’t one of the top three player in the mobile search market. According to a report from eMarketer and as the previous chart shows, Google (GOOGL) still dominates this market despite losing market share to other mobile apps. Searching directly through an app is much more convenient for users, which explains their increasing usage for search purposes.
The report also mentioned that other mobile apps, such as Microsoft (MSFT) Bing, Yahoo, Amazon (AMZN), Kayak, Indeed, and Shazam are increasingly popular search options. Yelp (YELP) is another notable player that has become important in the mobile search market as it competes with millions of other mobile apps.
Browse this series on Market Realist:
- Part 1 - Must-know: Yahoo’s 2Q14 earnings were disappointing
- Part 2 - Must-know: Will Alibaba help Yahoo?
- Part 3 - Why Yahoo still struggles in the display advertising business
- Information Technology
- Technology & Electronics
- mobile search
- mobile advertising