In order to offset sliding revenue, search engine biggie eyes 850 million mobile users in India
Most of us have had at least one Yahoo! mail id as the primary webmail. But with Google introducing Gmail services, Yahoo! lost its monopoly in the webmail market. Also, it couldn’t make its internet search services a success.
But now, Yahoo! is back with a mobile push, hoping to gain a hold on the fast-growing number of consumers connecting to the internet on smartphones and tablets, especially in emerging economies. The company’s focus on mobiles became more visible with the recent introduction of its first email application for the Apple iPad, as well as for tablets running on Google’s Android operating system.
When Marissa Mayer took charge as Yahoo! chief executive after a 13-year stint with Google, she made mobile services one of her priorities. Within about nine months of joining Yahoo!, Mayer has directed a redesign of the company’s email application for smartphones, and its photo service Flickr for iPhones and iPads.
Last week, Mayer told analysts the company’s mobile services now record about 300 million monthly visitors globally, against about 200 million in December. This increase, however, might not be enough for Yahoo!, which is struggling to secure advertisements that bring revenue. Yahoo!’s revenue from display advertising fell 11 per cent from the corresponding period last year. The primary reason, analysts pointed out, was advertisers were reluctant to pay substantial sums for smaller screens, especially mobiles. This has already resulted in a significant drop in Yahoo!’s average advertisement prices. And, globally, advertisers spend more in advertising on Google and social networking company Facebook. But, Yahoo!’s mobile push may help it in India, a market with more than 850 million mobile users. According to a Boston Consulting Group report, there are about 120 million internet users in India, and by 2015, this is estimated to rise to 237 million.
“Over the last year, we have seen an year-on-year growth of 54 per cent in the number of mobile users on the Yahoo! network,” said Nitin Mathur, senior director and head of marketing, India & Southeast Asia, Yahoo!.
In India, Yahoo is banking on tier-II and tier-III cities. The sky-rocketing growth in mobile sales is fuelling the influx of new-to-net users and leading to more time spent on the internet. “Mobile is a core area of focus for Yahoo!, along with rich content offerings across news, finance and entertainment. We are building immersive, personalised products, content and brand experiences that span across devices people choose to use. We understand the mobile phone is a core driver of people’s daily habits today,” Mathur added.
While the company has decided to shut email services in China from August, it recently launched the new Yahoo! Mail in India. “With its simple, easy-to-use design and native mobile apps, Yahoo! Mail has saved our global users 36 million minutes every single day since its launch a couple months ago. The new mail has apps in iOS, Android as well Windows,” Mathur said, adding, “Today, digital advertising accounts for three to five per cent of the overall advertising spend in India. Compared to developed markets, the Indian market has the potential to easily grow to about 18-20 per cent of the advertising pie.”
Recently, Yahoo! launched two mobile apps for email and weather update s. Now, the company is doing away with many long-standing products, including deals and SMS alerts, in an attempt to sharpen its focus.
Another service the company is focusing on is Flickr. “Flickr maintains the original photo quality… Overall, the focus in India continues to remain on mobile, video and engaging content experiences around entertainment, cricket, news and communication products such as mail, messenger and Flickr,” he said.
According to a report by comScore, Yahoo! has been recording a decline in traffic on its three major revenue-earning segments — Yahoo Mail!, search and homepage. In November and December 2012, search revenues fell 28 per cent and 24 per cent, while mail revenues dropped 16 per cent and 12 per cent, respectively. Monthly unique visitors to the homepage fell 17 per cent in November, but rose four per cent in December.
Mathur said today marketers rely on data-driven analytics for advertising, a clear advantage for the digital medium. “Growth in mobiles is accelerating at a tremendous rate in India. And, for many, mobiles are becoming their first point of entry to the internet. Today, India has about 80 million mobile internet users. The mobile is the ultimate personal device and our lives are centred around this,” he said.
Mathur said the inflection point for mobile advertising in India is yet to be reached, as smartphone penetration is below 10 per cent. “However, given the trend of addictive use of the mobile and mobile internet, it is perhaps a matter of time before mobile advertising becomes one of the leading vectors within digital,” he said.
“In India, Yahoo! is a leader in display advertising. We bring to the table a wide reach across the Indian internet audience — rich and immersive content experiences and easy-to-use communication products, offering our advertisers the unique advantage of not just scale, but also a large engaged user base,” Mathur said. In the mobile space, Yahoo! is largely focused on the data segment, through its WAP platforms. The future of mobile advertising lies in audience aggregation and delivering rich multi-screen brand presence to achieve the parameters of frequency and reach. “Due to this, large publishers who have a strong web presence, WAP and app presence would benefit from audience moving screens (mobiles and tablets),” he added. For Yahoo!, the biggest draw in India is the fact that except in social media, there is little competition here, unlike, say, in China., the next biggest internet market.
* Over the last year, the number of mobile users on the Yahoo! network have grown 54 per cent year-on-year
* For Yahoo!, the biggest draw in India is the fact that except in social media, there is little competition here, unlike in China
* There are about 120 million internet users in India, and by 2015, this is estimated to rise to 237 million
* In India, the inflection point for mobile advertising is yet to be reached; smartphone penetration is below 10 per cent
* Today, digital advertising accounts for three to five per cent of the overall advertising spend in India
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