Yahoo Makes a New Play for Ads on Mobile Phones
There may not be a Yahoo phone in the works, but the struggling Internet company is betting that a new mobile-phone strategy will help it better compete with the likes of Google,Microsoft and others for a share of the growing cellphone advertising business.
On Monday at the Consumer Electronics Show in Las Vegas, Yahoo is planning to announce that it has opened up some of its key mobile software and services to outside publishers and programmers in an effort to make Yahoo’s own mobile offerings more useful to more people.
The strategy falls in line with the chief executive Jerry Yang’s plans to turn around Yahoo by making it the “starting point for the most consumers” on the Internet. To achieve that, he told investors last fall, Yahoo would have to develop platforms that are open to outside publishers and developers.
MySpace, eBay and MTV Networks have already created mobile services that are accessible via a new Yahoo home page tailored for mobile phones and through Yahoo Go, a cellphone software package that Yahoo introduced two years ago. The Yahoo mobile home page and Yahoo Go both give users easy access to e-mail, search, news, weather and other services provided by Yahoo.
Now users of Yahoo’s mobile offerings will also have easy access to applications from other companies. As more of them create useful programs that run on top of Yahoo’s mobile services, the company hopes that more users will choose its services over those of rivals.
“If Yahoo really wants to become the starting point for everyone, it cannot be only about Yahoo,” said Marco Boerries, executive vice president of Yahoo’s connected life division, which operates its mobile division.
Mr. Boerries said that developers, who often find it frustrating to have to rewrite their software for multiple mobile platforms, would be able to create programs on top of Yahoo’s services, which themselves run across a broad range of devices.
But wireless industry veterans say that Yahoo’s attempt to become a platform faces hurdles and competition. Other companies, including cellphone makers like Nokia and Apple, and mobile software providers, like Google and Microsoft, are trying to lure third-party publishers and programmers to create services for their mobile platforms.
“It’s a standard pitch — build on our platform because we have the most ubiquity,” said Sam Jadallah, a partner at Mohr Davidow Ventures, a venture capital firm that has invested in several wireless companies. “It is a smart and ambitious strategy, but one that is very difficult to pull off.”
Mr. Jadallah said that becoming a software platform could prove especially difficult for a company like Yahoo, as it doesn’t control any phone’s operating system.
To achieve ubiquity, Yahoo may also need closer ties with some wireless carriers, which continue to play a major role in deciding what services are easily accessible to users.
Although Yahoo Go runs on about 250 mobile devices, and comes preloaded on some phones made by Motorola, LG, Samsung and Nokia, carriers in the United States strip the software from the phones. Currently, no American carrier offers phones with the Yahoo software installed, forcing American consumers who want to use Yahoo Go to download it themselves, a requirement that limits its distribution.
Mr. Boerries said that developers who write services to run on Yahoo’s mobile offerings could choose to have Yahoo deliver ads on those services.