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Is Yahoo failing in mobile?

While Yahoo's mobile application strategy has not set the industry on fire  ?  especially when it recently decommissioned 10 apps ? the company plans to make mobile a priority going forward. But is it too late?

Yahoo has seen its fortunes decline in recent years and recently hired Scott Thompson away from PayPal to be its CEO in a move suggesting a possible bigger role for mobile. The more recent move to drop 10 apps could be one way the company is paving the road for a stronger mobile strategy.

?While it might look like a step back, what they?re really doing is changing their roadmap so that they can hit bigger longer term goals,? said Dave Martin, senior vice president at agency Ignited, El Segundo, CA.

?Their hope will be to have a smaller number of bigger apps, which ideally will make their operations and yield management teams more efficient,? he said.

?Yahoo actually has quite a few successful apps that aren?t affected by this move. What they appear to be doing is getting rid of some of their weaker apps that cannot compete with market leaders.?

Yahoo is likely to take the best features from these 10 apps and either add them to current apps or build newer, better versions that have a better chance for success, per Mr. Hewitt.

HTML5 in the mix
The decision to drop 10 apps points to how it important it is for companies to think long-term when introducing mobile offerings and pick a platform that will not potentially force them to overhaul their efforts at a later date.

In a blog post announcing the decision to drop the apps, Yahoo said its mobile strategy going forward will use ?disruptive technology? ? which likely means HTML5 ? to help provide a seamless experience across devices.

?In today?s fast paced mobile market, mobile cannot be an afterthought? said Sri Ramanathan, chief technology officer at Kony, Orlando, FL. ?Instead, it has to drive development and communications ? I think we are seeing that in Yahoo?s new ?mobile first? way of thinking.

?Companies that think short-term about mobile risk losing the investments they make in developing applications. Working with a platform that incorporates the latest technology, including HTML5, is how companies can maximize their investments.?

However, the transition to HTML5 does present its own challenges. The technology is still relatively young and there are a number of things that cannot be done with it and several devices do not support it.

?For a major consumer brand like Yahoo that needs to reach millions of consumers across multiple devices, executing on their multichannel mobile strategy will be key,? Mr. Ramanathan said. ?Most of our customers, which include some of the world?s leading users of mobile IT, are swearing by a ?mixed mode? approach which takes the best of both worlds from both native applications and HTML5."

Strong assets
Yahoo has good assets in mobile, such as significant consumer engagement and interesting technology such as IntoNow, that it can take better advantage of.

Yahoo could also consider making an acquisition in the mobile space to help build its presence here, but that is considered unlikely since Yahoo?s pockets are not overflowing at the moment.

?Another option for Yahoo would be to try and acquire a mobile ad network or mobile technology company with an established footprint of reach or clients,? Mr. Hewitt said. ?But considering their financial concerns, ?Build? might be a better option than ?Buy? right now."

Yahoo said the decision to drop the apps was made in response to changing user needs. The apps covered by the announcement are Meme for iPhone and iPad, Mim for iPad, Answers for Android, AppSpot for Android and iPhone, Deals for iPhone, Finance for BlackBerry, Movies for Android, News for Android, Shopping for iPhone and Sketch-a-Search for iPad and iPhone.

While these apps have not found a lot of success, some of Yahoo?s other mobile apps including Yahoo Go, Weather, Finance, Sportacular and Flickr are doing well.

Advertising front
Yahoo also faces challenges on the mobile advertising front where it has not established itself as a leader.

In fact, the time may have passed for Yahoo to carve out an important role in mobile advertising on smartphones. However, there could still be an opportunity for the company in the newer tablet category.

?The growth curve of advertising on smartphones and tablets is still steep, so Yahoo still has time to find their niche,? Mr. Hewitt said.

?It is especially important that Yahoo expands their offering on tablets,? he said. ?There are no clear market leaders in delivering effective ad campaigns on iPads and other tablets, and Yahoo could have an easier time establishing leadership if they focus on the more nascent tablet ad market.?

The other opportunity for Yahoo on the mobile advertising front lies in its data.

?If they could effectively utilize the massive amounts of data they collect from their users online to better target them with mobile ads, they might have an advantage over other companies that have to outsource data for targeting,? Mr. Hewitt said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York