Yahoo Should Get Into the Big Data Business

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By Jacob Maslow

yahoo world HQIf there is any one company that would profit handsomely from the big technology trend of big data analytics, it is Yahoo Corporation. Seriously. A lot of analysts like to dismiss Yahoo (NASDAQ:YHOO) as some sort of holdover company that is way past its prime. It is easy to dismiss this digital content portal as primarily a relic of Web 1.0. I am of two opinions on this.

On one hand, I totally agree with Yahoo’s critics that the current management of Yahoo is focused primarily on content. They are focused on chasing advertisers and increasing the base of consumers that view Yahoo’s content. The problem with this type of strategy is that it is a losing game. As more and more content is consumed through social networks, old school content platforms like Yahoo are left behind. This is just going to get worse as more and more American consumers view online content through mobile devices like smartphones and tablets.

I would argue that this is a losing strategy. While it is obvious that Yahoo CEO Marissa Mayer is putting up a valiant fight buying up companies that have the talent to equip Yahoo to do well in a mobile age, I think it is eventually a losing battle. It is simply rearranging the deck chairs of the Titanic as it sinks. It is pointless.

On the other hand, I see a tremendous amount of missed opportunities as far as Yahoo technology is concerned. You have to remember that Yahoo still has a search engine. That search engine is picking up signals regarding content preferences, how websites link to each other, and how websites are related to each other. This is precisely the kind of big data points that advertising companies, digital media agencies, and other business-to-business clients would love to get their hands on.

This is why it is so frustrating if you are a Yahoo shareholder. You have this tremendous golden opportunity in front of you and Yahoo, for some reason or another, doesn’t want to capitalize on it. As I have mentioned before in previous blog posts, if Yahoo or Twitter are really serious about generating revenue, you have to focus on business-to-business, not on business-to-consumer. Business-to-business is more sustainable, the per-sale value is higher, and most importantly, it is scalable. Unfortunately, for all the talk about big data in the technology space, Yahoo seems completely blind to this opportunity.

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