Skip to main content

The buyer nobody considered: How Apple can leverage Yahoo

The past few weeks have brought the latest in several rounds of speculation regarding Yahoo! being acquired. Microsoft has been grabbing the biggest headlines, but speculation has discussed Verizon, Facebook and others.

I find it surprising that one of the most logical acquirers has not been mentioned. Namely Apple. Yahoo will compliment Apple's strengths, fill their gaps, and most importantly give them leverage for iDevice sales.

Apple, for all of their success in devices and media sales, does not have any strong position in mass market web services such as e-mail and search. Microsoft has Outlook (formerly Hotmail) and MSN.com. Facebook has mobile messaging (even for non Facebook users) and a controlling position in content consumption and advertising. Google has GMAIL and dominance in advertising. Apple, however, dominates media sales on iDevices through iTunes, but has very little for non-iDevice users. Are there any Apple services that are used by non-iDevice users?

Acquiring Yahoo would catapult Apple to a strong position in e-mail, search, news and other web services. While it will take work to turn around Yahoo's downward momentum, Apple has the cash to invest in it.

The critical factor, however, is that Apple can benefit from Yahoo's web services in ways that nobody else can. While others will look to Yahoo for direct profits, Apple can leverage Yahoo for device sales.

Unlike Google and Microsoft, Apple's primary profits come from device sales. Sales of music and movies are profitable, but their primary value is in creating the unique value proposition of iPhones, iPads and iPods for media consumption. This is in stark contrast to Amazon, who profits primarily from sales and not from devices, and Google, who profits primarily from advertising and not directly from Android.

What this means is that even if Yahoo's services are not profitable enough to support a company, Apple will benefit heavily if they leverage Yahoo services to motivate iDevice sales.

GMAIL users looking to buy a smartphone know that they can get better Google integration on Android phones. Google contacts and calendar are strongly integrated with Android, and Google apps such as Maps are often more advanced on Android than iOS. This Android support for GMAIL and Google services has paid off for Google: GMAIL user numbers have risen from 96M to 135M in the past 2 years, largely attributed to GMAIL being integrated with Android.

Suppose Yahoo mail users knew that iDevices would offer stronger support for Yahoo mail than Android? Suppose Yahoo contacts and calendar were integrated directly with iDevices? If Apple would gain even a small percentage of additional iDevice users, it would gain much more from Yahoo ownership than direct profit.

What other company can benefit so much from Yahoo services even if the profit from Yahoo services is lower than desired?

To date the idea of Apple acquiring Yahoo is pure speculation. It is true that most Apple acquisitions have been fairly small technologies that fill gaps in Apple's technology roadmap. They have had numerous acquisitions in the hundreds of millions of dollars range, but few in the Billions, and none the size of Yahoo.

But Apple's war with Google and Microsoft is heating up. Apple is losing device market share to Android devices, and when Apple's business model is built around device sales, this market share is central. As increasing numbers of smartphone buyers base their buying on e-mail and software integration, a Yahoo acquisition might be just the trick for Apple to counter Google.

Popular posts from this blog

Intel demos indoor location technology in new Wi-Fi chips at MWC 2015

Intel made several announcements at MWC 2015, including a new chipset for wireless connectivity (Wi-Fi) in mobile devices. This new chipset, the 8270, include in-chip support for indoor location positioning. Below we explain their technology and show a video of it in action. With this announcement, Intel joins Broadcom, Qualcomm and other chip makers in moving broad indoor location positioning into mobile device hardware.

The transition of indoor location positioning into chips is a trend identified in the newest Grizzly Analytics report on Indoor Location Positioning Technologies, released the week before MWC 2015. By moving indoor location positioning from software into hardware, chips such as Intel's enable location positioning to run continuously and universally, without using device CPU, and with less power consumption.

Intel's technology delivers 1-3 meter accuracy, using a technique called multilateration, generating a new location estimate every second. While 1-3 meter …

Seeing Quuppa's indoor location technology at MWC 2015

I first met Fabio and Kimmo from Quuppa in 2012, before Quuppa existed, when they had spent years researching indoor location positioning technologies at Nokia Research Center. Less than a year after that they formed Quuppa, independent of Nokia, to bring their technology to market. At the time I called Quuppa "the newest and oldest in indoor location positioning."

Fast forward two and a half years. Their technology has reached market, it can now track both smartphones and BLE devices, and it's accurate to within 20-50cm. Before reading more about their technology, take a look at a video of their demo in action:



Grizzly Analytics has analyzed indoor location technologies by over 150 companies, and virtually all of the radio-based technologies operate by measuring the distance between the device being tracked and other radio devices, and using these distance measurements for either multilateration or fingerprinting. For example, the well known BLE beacons measure a device…

Robot Camera Foreshadows an Era of Location-Aware Electronics

A French company called Move 'N See produces a line of camera robots. Their devices act as a smart tripod, holding a video camera and automatically moving and zooming the camera as people of interest move around a site.

The idea is simple but amazingly innovative. Photo selfies are easy to take, but video selfies are next to impossible. How can I video myself playing football or doing gymnastics, without setting the camera so far back as to be useless? Do spectators want to spend an entire sporting event carefully videoing their friend or relative moving around the field?
Enter Move 'N See's "personal robot cameramen." Their devices aim, pan and zoom a video camera as one or more people move around an area. The people of interest wear armbands whose locations are tracked, enabling the camera controller to know where to aim the camera. The camera controller also includes enough smarts to adjust the camera smoothly and to capture multiple people evenly. The armband…