Summit News

Yahoo eyes acquisitions, social media

NEW YORK (Reuters) - Yahoo Inc is looking to buy companies that will allow it to become a bigger player in social networking and revamp its family of products, Chief Technology Officer Ari Balogh said on Wednesday.

A Yahoo! sign is seen in New York's Times Square November 18, 2008. REUTERS/Brendan McDermid

“It’s a good time to be buying now,” he told the Reuters Global Technology Summit, pointing to valuations that have come down from levels six to nine months ago.

While declining to give specific names, Balogh said Yahoo has had conversations with companies about partnerships and “more interesting” possibilities, such as on building out its platform and basic computing in addition to search.

“I can guarantee you there will be some acquisitions, and we will do some stuff in-house,” Balogh, who is executive vice president of products at Yahoo, said by videolink.

Yahoo will introduce new products this fall that will give users a more unified experience across its network of websites and showcase the company’s strategy to grow again, after much of 2008 was marred by the failed deal talks with Microsoft Corp.

Yahoo is striving to revive its fortunes as sales decline because of the recession and competition from other Web heavyweights, including Google Inc and Facebook.

While conceding that Google has “won the game” of search as we know it today, Balogh says search will be about much more than “10 blue links” in the future.

“The thing I will tell you is that, core to great experiences for people online may not necessarily be this version of search,” Balogh said. “I believe search is going to be far richer ... there’s a whole other round or two to go in the search game and that’s where we intend on playing.

The future of Yahoo’s Internet search business is a big question for investors. Yahoo Chief Executive Carol Bartz and Microsoft CEO Steve Ballmer have talked about partnering on search, according to a source familiar with the matter.

Balogh said any decision about a search deal was up to Bartz and Yahoo’s board. But he said that whatever happens, Yahoo will continue to invest in its own search capabilities.

Balogh said search technology is a vital part of the consumer experience that Yahoo delivers, “and having leading edge scientists and technologists who understand search technology and where search is going is critical to Yahoo.”


Yahoo is the No. 2 U.S. search engine, with 20.4 percent market share in April, according to comScore. Google increased its share by half a percentage point in April to 64.2 percent of the U.S. market, its highest level ever.

Yahoo earned $118 million in the first quarter, while its sales declined 13 percent year-over-year to $1.58 billion.

While advertising spending is down industrywide due to the weak economy, Balogh said Yahoo was seeing strong interest from advertisers for new ways to promote their brands online.

The recent management reorganization, which combined the engineering and product development staff, is allowing the company to create better cell phone products that take advantage of Yahoo’s strengths, Balogh said.

“For how many incredible applications we could have and should have, for all the experience on Yahoo, we are terribly under-represented,” Balogh said about Yahoo’s smartphone applications.

He said Yahoo would release a fantasy sports application for Apple Inc’s iPhone this year.

And he said the company would introduce features that tie together a user’s personal settings and preferences for Yahoo products between a PC and a cell phone.

The new generation of social networking products is one area where Yahoo needs to “drive harder,” said Balogh. He cited new status update features that will be introduced across Yahoo sites in the coming months as an important part of Yahoo’s social strategy.

Yahoo’s vast number of users give the company an extensive social networking backbone. That means Yahoo can quickly build-out its social infrastructure with “tuck-ins” of interesting products being developed by other companies, Balogh said.

“We’re getting the pulse of companies you might not know about as well as interacting much more aggressively with companies you do,” Balogh said.

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(Reporting by Alexei Oreskovic and Anupreeta Das; Editing by Tiffany Wu, John Wallace, Phil Berlowitz)

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