The fact that one of Yahoo's core businesses is half-dead isn't making the CEO happy
Over the past few years, Yahoo has managed to straighten itself out a bit, to increase the revenues, to reinvent itself through the products it offers. One of the areas where the company really wants to win back some ground is as a search engine.That, however, isn’t exactly possible in the way that Yahoo wants it to since the company signed a deal with Microsoft four years ago. The 10-year contract pushes Yahoo to outsource much of its search to Bing.
As Re/code points out, Yahoo is currently in a tight spot that it can’t really get out of, as much as Marissa Mayer may want to.
On the other hand, Yahoo is getting a lot of money out of the deal. According to the company’s fourth quarter earnings report, earnings from Microsoft accounted for 31 percent of the company’s revenues.
Even so, it looks like Mayer is keen to consolidate its “Three S’s” plan. This includes Stream, Shopping and Search. While she has a good grasp on the first two, the third one was denied to her before she even joined Yahoo, taking into account when the deal was signed.
However, she still has some wiggle room – instead of focusing on the Web and keywords (which contractually belong to Microsoft), Mayer can look into mobile and contextual search.
“When I look at things like contextual search, I get really excited. The amount of information available to build a service on is just incredible,” Mayer said at the Goldman Sachs investors conference, as Re/code reports.
This type of search uses signals that users share, instead of the plain keywords that everyone inputs into search boxes.
The deal that signed off Yahoo’s search business over to Microsoft has been heavily criticized by insiders who don’t believe it to have been too wise considering it was one of the core components of the company.