Yahoo has a history of buying spectacularly priced companies, then running them into the ground. Unfortunately, this is not good news for recent acquisitions of Yahoo. Though it’s possible that these companies may survive, the past failures say a lot. Over the last few months, Yahoo has purchased a huge number of companies, and it’s going to be interesting to see what happens with them.
1. Qwiki
In July 2013, Yahoo purchased Qwiki. If you haven’t heard of the company, it’s not surprising. The Qwiki app is on iOS, and it is said that it will stay there. With this app, users are able to make movies with their videos and pictures on their cameras. Said to be purchased by Yahoo for $50 million, Qwiki is already having problems. Even before the acquisition, the company was being sued by Chaotic Moon, the company who developed the app. They claim that Qwiki never paid them. This doesn’t bode well for the company. Pair this with the well known fact that Vine is widely popular and Instagram just released video capabilities with their popular filters, and Qkiki might quickly disappear.
2. Tumblr
Image via Flickr by Joe Ross
May 2013 brought the news that Yahoo had purchased the blogging platform Tumblr for $1.1 billion. Unfortunately, this brought with it bad news for the company, as many Tumblr users fled from the platform to other options. Why the exodus? Remember Geocities, back in the 90’s? If you’re younger than mid-20’s, you probably don’t. People are concerned that Yahoo is going to run Tumblr into the ground, just like it did after the Geocities acquisition. Yahoo is stating that Tumbr is going to stay an independent company, and retain its own CEO, David Karp. Users however, are not so confident. Tumblr recently made some big changes to the site that has caused quite a stir among it’s more committed users. With so many changes and uncertainty, we could see the beginning of the end of this once promising platform.
3. Xobni
Whether you use Hughesnet satellite Internet or any other provider for your web browsing, it’s likely you check your email on a regular basis. Yahoo purchased Xobni for $40 million, and it’s assumed that this is because the company is known as a great email app. Unfortunately, Xobni started out with some major problems, including being accused of spreading malware. When you combine these original accusations with the hacking issues that Yahoo has had with their email client, it doesn’t look good for Xobni. Two problematic email clients together make major issues, it doesn’t inspire great confidence in consumers.
Users are also flocking to trusted email services like Gmail, as it meshes seamlessly throughout most platforms, like the iPhone and of course the market leading Android market. As more and more people adopt Gmail, the less opportunity there is for Yahoo to build up a large enough email base to warrant such acquisitions.
4. Loki Studios
While it’s a great thing to make sure a company has a focus, if you narrow that focus too much, you’re going to end up stifling creativity. That is some of the concern with the purchase of Loki Studios. While the gaming studio previously produced a variety of games, it is now said that they will only focus on mobile gaming. Mobile gaming is growing, so this is a positive for Loki Studios. However, there is also some concern that the studio will be disbanded, and that Yahoo simply wants the developers, not the games. Regardless, consumers are becoming more and more aware of what mobile games are worth playing and which ones exist only to drive in app purchases. This trend could be the nail in the coffin if Yahoo was looking to make a quick buck on the dying in app purchase mobile gaming phase. There’s a growing demand for low cost, high quality games that don’t require any further payment beyond the initial investment to play. Yahoo should make a point to pay attention to these facts.
Yahoo doesn’t have a great track record with the companies they purchase. Current CEO Marissa Mayer is on a mission to get the best of a variety of start-up companies. This is why she is on a purchasing rampage. What do you see happening with Yahoo’s most recent acquisitions?
