The Slow Death of Yahoo! Local

When Yahoo! first hired Marissa Mayer in July of 2012 as their new CEO, digital marketers were rejoicing. As the former VP of both Search and Local at Google, Mayer had the experience and tenacity needed to push Yahoo!’s local search and maps products to new heights. Everyone expected Mayer to drive product innovation and revenue through Yahoo!’s local products, but in October of 2012, Mayer shocked everyone by noting Yahoo! will focus on search but will not focus any efforts on local.

Shortly after Mayer took over, Yahoo! began to fall apart, which is best illustrated through Yahoo!’s and Mayer’s Wikipedia pages, and related articles.

Here is the TL;DR version:

Yahoo! has outsourced their search results, ad platforms, and local listings to third parties. Yahoo!’s core business has been worth less than zero dollars for the past few quarters resulting in a layoff of 15% of Yahoo! employees. Mayer and Yahoo! executives are floundering as they try to cut costs and increase revenue wherever they can in hopes of an acquisition. While digital marketers wait for Yahoo! to be acquired and overhauled, we’re left deciding if we want to put any effort toward Yahoo through the third parties, or focus on the omnipresent and omnipotent conglomerate known as Google.

Here is the detailed version:

• In January 2010, Microsoft announced a deal in which it would take over the functional operation of Yahoo! Search, and set up a joint venture to sell advertising on both Yahoo! Search and Bing known as the Microsoft Search Alliance. A complete transition of all Yahoo! sponsored ad clients to Microsoft adCenter (now Bing Ads) occurred in October 2010.
  • In April 2015, the Microsoft partnership was modified, now only requiring Bing results on the “majority” of desktop traffic, opening the ability for Yahoo! to enter into non-exclusive deals for search services on mobile platforms and the remainder of desktop traffic.
  • In October 2015, Yahoo! subsequently reached an agreement with Google to provide services to Yahoo! Search through the end of 2018, including advertising, search, and image search services.

• On July 16, 2012, Mayer was appointed President and CEO of Yahoo!
  • On October 22, 2012, Mayer noted Yahoo! will not be focusing on local

• On May 19, 2013, Yahoo! purchases the blogging site Tumblr for $1.1 billion
  • In February 2016, Yahoo! acknowledged that the value of Tumblr has fallen by
    $230 million since it was acquired

• By the fourth quarter of 2013, the company’s share price had more than doubled since Marissa Mayer took over.
  • Much of this growth may be attributed to Yahoo!’s stake in the Chinese e-commerce company Alibaba Group, which was acquired before Mayer’s tenure

• On March 12, 2014, Yahoo! partnered with Yelp to boost its local search results to better compete with services like Google
• On November 11, 2014, Yahoo! acquired video ad company BrightRoll for $640 million
  • The BrightRoll acquisition translates to a 6.4X sale multiple, much higher than the average of its peers, which trade below 1.0X sales

• In 2014, Mayer was heavily criticized for many of her management decisions in articles by The New York Times and The New Yorker
• In 2015, Yahoo! stocks continued to fall by more than 30%, while 12 key executives left the company
• In June of 2015, Yahoo! Maps was shut down, shortly followed by an agreement requiring all local listings to be updated through Yext
• In December of 2015, the New York-based hedge fund, SpringOwl, a shareholder in Yahoo! Inc., released a statement arguing that Mayer be replaced as CEO
• By January of 2016, it was further estimated that Yahoo!’s core business has been worth less than zero dollars for the past few quarters
  • In February of 2016, Mayer confirmed that Yahoo! would be laying off 15% of its workforce and is considering the possibility of selling its core business
  • Mayer could earn up to $158 million if Yahoo! was sold, as part of her severance package

Photo by Kace Rodriguez, alterations by Location3 Media