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What Yahoo gains, loses with Qwiki app acquisition

The mobile video space is increasingly becoming more crowded with marketers all vying for consumers? attention while they share videos with friends and family. Yahoo is obviously trying to get in on this action with its recent acquisition of Qwiki, but also faces a few unique opportunities and setbacks.

Since Marissa Mayer became CEO of Yahoo last year, the company has been on a buying spree and is snapping up companies left and right. The most recent acquisition of Qwiki could help the company differentiate itself from competitors such as Facebook's Instagram and Twitter's Vine.

?I think anyone has a chance in the video space as long as they do something different,? said Arun Ramdeane, senior account executive at Atimi Software, Vancouver, British Columbia, Canada.

?If you talk to anyone from Qwiki, I am sure they will be quick to say they are not a video app,? he said.

?They are very quick to describe their service as a one-tap storytelling app. And, as such, it is a great storytelling app. You can simply select all of your photos from a trip, add music and share. It is a great way to share your experiences.?

Mobile video
Qwiki is an iPhone app that lets consumers turn pictures and videos that are taken on mobile devices into short videos that can be customized through different filters.

Instagram and Vine have similar propositions, but what makes Qwiki different is the app?s focus on creating a more comprehensive experience.

For example, consumers can customize the videos with captions and music that can then be shared out to friends and family via SMS, email and social media sites.

Additionally, users can drop and drag elements to edit their videos.

Although the mobile video space is crowded, Yahoo could potentially have a leg-up here since Qwiki's value proposition for consumers with the app?s ability to store and organize photos.

Yahoo also recently overhauled its Flickr mobile app and Web site, which could be leveraged significantly with the Qwiki app (see story).

Qwiki will continue to be available in Apple?s App Store, and the mobile app's staff will begin working at Yahoo?s New York offices, per a Yahoo blog post.

Since Qwiki will continue to exist as a supported app, the opportunities for Yahoo to brand itself and incorporate its products into the app are significant.

?Yahoo is on a mission to become the No. 1 place for smartphone content and apps,? said Carl Howe, vice president of research and data sciences at Yankee Group, Boston.

?This [acquisition] in particular is interesting because of the video-sharing genre, but this app is a little different ? not only does it create videos, but it also creates music,? he said. ?It is a little viral and takes advantage of stuff that?s already on your phone.?

?The bottom line is that I think it?s going to be popular and put the brand in front of more people.?

Too little too late?
According to an article published by All Things D, Yahoo reportedly paid $40-$50 million to acquire Qwiki.

Yahoo is aiming to become a mobile-first powerhouse through its string of acquisitions that also include buying social media giant Tumblr earlier this year for a whopping $1.1 billion in cash (see story).

However, some experts say that Yahoo is too late to the game to compete with other industry leaders such as Facebook and Google that have chipped away at Yahoo?s business over the years.

For example, both Instagram and Vine already have substantial user bases.

Instagram has roughly 130 million monthly users, and Vine reported having 13 million users when it launched its Android app in June (see story).

Additionally, there is not a unifying tie between Yahoo?s acquisitions that incorporate all of its assets.

Take Qwiki and Tumblr, for example.

The two companies make a natural fit since mobile video is inherently social, but a blog post from Ms. Mayer last week solidified that Tumblr will continue to operate as a separate business under the leadership of CEO David Karp.

By operating as a separate business, Tumblr will not likely be able to take advantage of Yahoo?s recently-acquired assets.

?Overall, Yahoo definitely needs to reinvent itself and that?s the mission the new CEO took on,? said David MacQueen, London-based director of wireless media strategies at Strategy Analytics.

?The recent acquisition spree is a sign of that, although with so many acquisitions I suspect integration will become a significant issue for Yahoo,? he said.

?There do seem to be several synergies and clearly overall the drive is toward social content and sharing. However, Yahoo is largely playing catch-up to others in the space.?

Final Take
Lauren Johnson  is associate reporter on Mobile Commerce Daily, New York