In an Effort to Up Its Mobile Ad Game, Yahoo Acquires Flurry
Yesterday, Yahoo announced that it has agreed to buy Flurry, a mobile ad and analytics company that aims "to optimize the mobile experience through better apps and more personal ads," in a play to increase its currently so-small-it's-almost-nonexistent mobile-advertising revenue channel.
While financial terms of the deal were undisclosed the tech blog Re/code, which first reported the acquisition, placed the price at "hundreds of millions," while The New York Times reported that Yahoo paid around $300 million.
If true, this makes Flurry one of Marissa Mayer's biggest purchases in what has been an acquisition happy two-year tenure as Yahoo's CEO.
It also means Yahoo is finally serious about entering the mobile-advertising game, an area the company's competitors, such as Facebook, Google and Twitter, have been aggressively cultivating for some time now. (Facebook, for example, bought the data analytics company Onavo last October).
Founded in 2005, Flurry has a wealth of information about smartphone usage: the San Francisco-based startup's analytics are used by 170,000 developers globally, according to the company, and tracks app activity on more than 1.4 billion mobile devices.
"The joined offerings of Yahoo and Flurry will enable more effective mobile advertising solutions for brands seeking to reach their audiences and gain unique insights across desktop and mobile, and users will benefit from more personalized app experiences," Scott Burke, Yahoo's SVP of advertising technology, wrote in a post announcing the deal.
These insights could help Yahoo build its mobile-ad business. Currently the company's revenue from mobile ads is a non-factor, despite the fact that Yahoo's mobile usage is rapidly growing. (More than half Yahoo’s total monthly audience visits on a mobile device and time spent on mobile has grown 79 percent over the last year, according to the company's Q2 earnings.)
But is this the acquisition the right one for Yahoo?
While it's undeniable that Yahoo needs to beef up its mobile strategy, Flurry has hit a few stumbling blocks before yesterday's acquisition. Last fall, the startup's CEO Simon Khalaf told Business Insider that taking the company public was "inevitable" adding, "We don't have a choice." Meanwhile, TechCrunch quotes a source who claims that Flurry was "racing towards a sale." In addition, the estimated $300 million Yahoo ponied up to acquire the startup is significantly less than the $700 to $800 million price tag the company originally wanted, the outlet reports. (Rumored buyers included Amazon).
The question, then: Is Yahoo's most recent acquisition an amazing bargain or an expensive mistake?