When Marissa Mayer took over as CEO of Yahoo last year there was some hope that she would bring more focus to a company that had long been adrift and without clear goals. Wired’s Ryan Tate, however, notices that Yahoo under her reign has actually become “more bloated” by paying $1.1 billion for blogging service Tumblr and $30 million for news digest app Summly. What’s more, the company has put itself in the mix to buy a stake in Hulu by reportedly bidding between $600 million and $800 million, so it doesn’t seem as though the company exactly has a laser-like focus on one particular area these days.
How to explain these actions by a CEO who earned a reputation at Google for keeping things nice and simple? Tate says that Yahoo really doesn’t have much of a choice but to expand into an all-encompassing web portal if it wants to stay relevant to advertisers who increasingly want more detailed information on web users.
“You’ll notice Yahoo has no world-dominating social network like Facebook, or even a respectable runner-up like Google+,” he writes. “It has to cobble together information about you from various sources, like information you’ve attached to your Flickr photo account, in your Yahoo Mail signup, within your Yahoo Finance portfolio tracker, via your Yahoo search history, and so on.”
Because it lacks a central source for information gathering, it needs to focus on getting as many different types of information channels as it can to “expand, not narrow, the pool of potential information sources.” From this perspective it’s easy to understand Mayer’s decisions to move aggressively with certain acquisitions even if they seem to cut against her reputation for focus and simplicity.