Why did Yahoo Livestand fail and lessons to learn
May 31, 2012
Yahoo's Livestand app
Although Yahoo Inc.’s recent killing of Livestand could point to the company not having a centered mobile strategy, it is still too soon to count the media publisher completely out of the race, according to analysts.
The mobile space is thick with other news aggregator and media companies all pushing content onto mobile devices. Because of the high number of companies involved, several analysts think that Yahoo pulling Livestand could be a sign that in order to succeed, marketers need to think of ways to carve out a niche in the market.
“In short, the easy answer is that Yahoo did not understand the conditions of the market,” said Josh Martin, director of app research for the global wireless practice at Strategy Analytics, Newton, MA.
“But it’s not an indication of the news aggregator industry – Yahoo drew up a poorly-executed idea and it’s better for them to kill it now rather than later,” he said.
Yahoo did not respond to press inquiries.
Yahoo launched its Livestand newsstand in October 2011 with the promise of bringing advertisements to life with engaging sound, motion and graphics. The cost to advertise on the platform ranged between $20,000 and $500,000 for ad units though, causing speculation over the high price tag.
Similar to competitors such as the Flipboard and AOL’s Editions, Yahoo positioned the Livestand iPad app as a way to bundle news content from across the Web into a customized package.
However, Yahoo was also late to enter the space. Apps such as Flipboard, which launched in 2010, already had an established reputation.
The Livestand iPad app
“The space is relatively crowded, but Yahoo came late to the party,” said Kevin Culbert, senior analyst at IBISWorld, Santa Monica, CA.
“It is difficult to enter and compete against an established best player,” he said.
In addition to writing off Livestand, Yahoo also launched its mobile browser app Axis, which lets consumers browse the Web on desktops and mobile devices.
The move could signal where Yahoo’s intentions are headed with HTML5-based products. The idea behind Axis is that it connects users’ desktop and mobile Web browsing.
Yahoo's Axis iPad app
In a blog on the company’s Web site, Yahoo said that it is working towards a mobile-first strategy.
“We are pivoting to a mobile-products-first development model and there’s no doubt that one of the biggest, if not the biggest, priorities for us is to innovate for the mobile user, whether they’re using feature phones, smartphones or tablets – or iOS apps, Android apps or mobile web browsers, for that matter,” the blog post said.
However, Yahoo has also gone through four CEOs in the past five years and by consolidating its products, it could be a further sign that the company is not doing well.
Without a clear focus on a long-term mobile strategy, Yahoo will have to work hard to establish itself as a prime player in mobile.
“I think there is a big question mark about Yahoo’s long-term strategy - what it should be worried about is how to transition from being a Web business to making revenue on mobile,” said Jason Armitage, London-based senior analyst at Yankee Group.
“Basically Livestand was part of its short-term strategy of cutting costs and boosting cash,” he said.
According to some mobile experts, the main takeaway point from Yahoo’s Livestand primarily affects publishers and how media brands need to think about monetizing content.
“I think to monetize, publishers are thinking less about aggregation and more about doing their own things,” said Mark Beccue, senior analyst at ABI Research, New York.
News aggregator apps often go head-to-head with publishers that have long-established brands in app stores.
Depending on what types of content consumers are looking for, they might be more inclined to download and subscribe to a branded app if the content is relevant enough.
For example, ABI Research recently found that magazines, newspapers and books were tops areas of tablet consumption, meaning that it will be difficult for independent news aggregators to crack into the space.
“We’re just on the edge and nowhere near mass market,” Mr. Beccue said.
“One thing is that if you are in the space you have to say, ‘How will consumers use tablets?’ and really think through those ideas,” he said.
“Do focus groups, play with these things to understand the device and its uses and then think about what you want to do.”
Lauren Johnson is editorial assistant on Mobile Marketer, New York
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