Yahoo Is Even Worse Off Than Anyone Realized


Its core properties are rapidly losing audience and the company is shutting down half its content verticals.

What do Yahoo Mail, Yahoo.com, and Yahoo Search all have in common?

According to paid technology news service The Information, all three properties of the beleaguered company are losing their audiences — and fast. The leak comes as another new forecast shows Tumblr is also struggling, and on the same day Yahoo is reportedly shutting down several of its content verticals.

The Information‘s Amir Efrati reports confidential internal data from Yahoo showing that the number of daily active users visiting Yahoo’s home page declined 16.5 percent the first week of December 2014 and again the first week of December 2015. For Yahoo Mail, the decline was 11.5 percent and for search, 8.8 percent.

The audience declines serve as “a reminder of the deep challenges any potential buyer of Yahoo would face,” writes Efrati. Yahoo board chairman Maynard Webb indicated earlier this month that the company is for sale.

Meanwhile, analysts at eMarketer say Tumblr appears to be approaching a plateau in user growth and that it will fall further behind competitors over time. Tumblr is expected to grow to 23.2 million users this year, which is less than half the user base of Pinterest and less than a third of that of Instagram, according to eMarketer.

This year is the last year eMarketer predicts Tumblr will see double-digit user growth, at 10.5 percent. By 2020, its analysts think growth will slow to 4.1 percent.

Efrati reported that Tumblr and Yahoo Sports were performing well relative to other Yahoo properties.

He referred to Tumblr, which Yahoo acquired in 2013 for $1.1 billion, as “one of the crown jewels in the company’s portfolio.” Efrati cited growth of 13 percent in total daily active users and 30 percent in mobile daily active users over the course of 2015 at Tumblr. Efrati’s numbers on Tumblr differ somewhat from eMarketer’s, and he mentioned in the report that his data came from different product teams.

Yahoo Sports saw total daily active users decline 8.5 percent in the same time frame, while mobile daily active users increased 8.6 percent.

Audience declines and receding user growth together comprise only a one piece of waning tech giant Yahoo’s progressive meltdown under the leadership of CEO Marissa Mayer. Politico Media reported Wednesday the company is shutting down half its content verticals, including tech, food, autos, health, and music.

The news follows an announcement during the company’s fourth-quarter earnings call February 2 ago of a 15 percent reduction in staff, despite reporting revenue above analyst expectations. In seeming contradiction to news of Yahoo’s fatal failings, Mayer said in a statement that day that the company was working on a turnaround.

“Today, we’re announcing a strategic plan that we strongly believe will enable us to accelerate Yahoo’s transformation,” she said. “This is a strong plan calling for bold shifts in products and in resources.”

The numbers cast skepticism on her claims.

“Among the takeaways from the data: Yahoo’s transition from PCs to mobile is far from complete, and it’s a painful one. The company has made little headway in attracting younger people to its services. The data cast doubt over CEO Marissa Mayer’s projection that Yahoo will get back to revenue growth in 2017 and beyond,” writes Efrati.

 

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