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Microsoft buys out Nokia! (Finally)

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 3, 2013

There then, didn’t i say it?

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In an earlier post dated July 2012, i had quoted Eldar Murtazin on a supposed rumour of Microsoft buying out Nokia. The moment has arrived as Microsoft has announced take over of Nokia’s portfolio of smartphones, patents and services to mount a more formidable challenge to Google and Apple.

The 5.44 billion euros ($7.2 billion) deal announced late Monday marks a major step in Microsoft’s push to transform itself from a software maker focused on making operating systems and applications for desktop and laptop computers into a more versatile and nimble company that delivers services on any kind of Internet-connected gadget. The proposed price consists of 3.79 billion euros ($5 billion) for the Nokia unit that makes mobile phones, including its line of Lumia smartphones that run Windows Phone software. Another 1.65 billion euros ($2.2 billion) will be paid for a 10-year license to use Nokia’s patents, with the option to extend it indefinitely. It will represent the second most expensive acquisition in Microsoft’s 38-year history, ranking behind an $8.5 billion purchase of Internet calling and video conferencing service Skype.The operations that are planned to be transferred to Microsoft generated an estimated 14.9 billion euros, or almost 50 per cent of Nokia’s net sales for the full year 2012.

To me, the marriage has been in the making for long – ever since Stephen Elop joined Nokia as CEO in 2010. Elop has been single handedly instrumental in aligning Nokia to Microsoft – at the cost of cutting out other platforms from Nokia – Meego in particular which was a very promising platform. The fabled act of putting “all eggs in one basket” i.e concentrating all of Nokia’s high end effort on the Microsoft platform bypassing Android as an option. The Lumia series of Nokia smartphones has not exactly set the Nokia Cash registers on fire. Elop also worked out to lean out Nokia moving out 20000 workforce/jobs. Nokia has lost more than 5 billion euros in nine quarters as Elop’s comeback bid hasn’t reversed market-share declines. Through Elop’s tenure, Nokia’s basic phones have been losing users to Chinese rivals and new smartphones have failed to stop shoppers from picking up Samsung and Apple devices. Nokia Smartphone business hasn’t been performing very well. Nokia which sold close to 28 million smartphone handsets not long ago in December 2010, has managed to sell only 7.4 million Lumia handsets in Q2 2013. That said, Nokia’s low end handset business and its Asha platform hasn’t been performing well.Stephen Elop sets out from Nokia and into Microsoft to possibly see the acquisition to a closure by early 2014.

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Microsoft bets on Nokia for its formidable patents and the hardware edge that Nokia brinsg to the table. Microsoft’s attempts at making its own device (Surface & Surface RT) have been less then spectacular given the $900million write off for last year.

My take on the take over – (It hasnt changed over the past 4 years)
Both Nokia and Microsoft really missed the boat in terms of smartphones, and it is extremely difficult to claw your way back from that. The question is whether combining two weak companies will get you a strong new competitor. It’s doubtful.

Mobile Phone Industry’s a bitch! (Unforgiving)

Posted in Industry updates, Mobile Computing, Mobile Devices and Company Updates by Manas Ganguly on August 25, 2013

How the high and mighty fall aside to give way to new blood!

Thats the perpetual script of the mobile phone industry… You miss the bus once – there isnt any catch up left to do. Industry marquees such as Nokia, Motorola, Blackberry, Sony, HTC have seen their growth and margins erode – caught unawares amidst scope and landscape changes. There seems to a pattern where each vendor reaches a peak share, though that peak varies greatly in value and then goes into a decline, which again varies from drastic to gradual.

Phone OEM Shares of Profit Revenues

The only ones who have bucked the trend so far is Samsung and Apple – though Apple is beginning to show weakness. However, if the industry trend were to continue Samsung would hit its decline within an year – give it a couple of years at maximum.

Source: Asymco

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Steve Ballmer & Microsoft’s Lost Decade

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Steve Ballmer, CEO Microsoft since January 2000 is to retire from his post within the next 12 months. Rumours are that our man was asked to march since the board was not too please about the $900 Million write offs on a spate of current projects. Within a few hours of this release, Microsoft stock jumped by $2.36 (7.3%) over a broad trade of 223.3 million shares. The news of Ballmer’s exit added an immediate $20 billion to Microsoft’s capitalization.

The movement of the MSFT scrip shows a variance of 97 cents on 23rd August with the share touching $34.97 post Ballmer's Announcement. Initial Euphoria?

The movement of the MSFT scrip shows a variance of 97 cents on 23rd August with the share touching $34.97 post Ballmer’s Announcement. Initial Euphoria?

Over the course of last 14 years, Microsoft hasn’t really done significantly different – besides sharing the spoils with investors in terms of dividends. Yes, it has increased the market capital of Microsoft – but as far as results go – there is hardly anything much on the board. With Ballmer at the helm – Microsoft has actually offered negative returns. Ballmer can be credited with an effort to shift strategies at Microsoft – but it didnot really pay off.

MS Share Prices

If you compare the indices of Microsoft versus Dwo Jones, NASDAQ and S&P500, the picture that comes through is an eye opener.

Microsoft Compared

To put the numbers – Dow Jone outperformed Microsoft by 3X in Ballmer’s Decade, S&P outdid Microsoft by 10% through the Decade. The face saver was NASDAQ, the technology index itself dropped by 10%. Compare Microsoft’s stagnant share price to 700% increase in Gooogle’s share price value and a 1600% escalation in share price of Apple.

Microsoft versus Apple & Google

Microsoft S&P NASDAQ DJ

Infact, Apple’s Get a Mac campaign was a very clever lampoon of the archetypical Ballmer personality. In Ballmer’s decade, Apple overshadowed the Redmund giant and emerged as the quintessential technology business after bringing the revolutionary iPod, iPhone, and iPad platforms to market. To date, only Google Android has emerged as a formidable rival to the popular Apple iOS operating system. Meanwhile, Microsoft and Ballmer have been literally caught with their pants down. In hindsight – Ballmer never really estimated the eco-system effects and advantages and consequentially was never able to capitalize.

Ballmer met some degree of success with the Microsoft XBox and Kinect – the only game changers. However, XBox and Kinect have not translated into any huge seismic impact – quite unlike the other Steve in town – the one from Apple.

Steve Ballmer’s greatest gambit (and his greatest failure in course) was Windows 8 – The equivalent to the promised land for Microsoft – the back bone of Microsoft’s future in personal computing from Tablets to Laptops to Smartphones. A year of Windows 8 later –

1. Windows 8 has not even nudged the cash registers at Microsoft
2. Reports have suggested that Windows 8 sales and adoption has trailed behind Vista at similar points of Product Life cycle chronologies
3. Windows is still some distance from being able to make a mark in the Tablet segment even while PC Desktops and Laptops keep getting written off… PC Markets have been shrinking for 5 consecutive quarters and there appears no hope of recovery in the horizon
4. At low single digits market shares in Smartphones and Tablet markets – Microsoft is a relative non factor. At Microsoft’s scale – they ought to be looking at upstaging Android and not be overjoyous about the decline in Apple.

It is perhaps ironical, that Microsoft and its Wintel partnership must fail to Moore’s law. Wintel understood the law pretty well in terms of size and power management principles – but miscalculated the consumption shift towards smartphones and tablets.

To sum up, Steve Ballmer has been very instrumental and effective in running existing product lines – but in terms of innovation and new products – Ballmer has been less than good and the 13 years at helm of Microsoft have been years of opportunity loss – Microsoft’s lost Decade.

Why Intel doesnot inspire any much confidence any more?

Posted in Industry updates, Mobile Computing, Mobile Devices and Company Updates by Manas Ganguly on August 7, 2013

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As tablets continue to pound on Laptop and Netbook segments – and the Laptop/Netbook segment is at best projected to be stagnant if not decreasing in terms of y-o-y shipments it is difficult to harbor any significant optimism about Intel. Intel has been trying to migrate its business to the Handhelds given the impending fall of the Wintel Franchise. It is clearly trying to move away from the Wintel Monogamy to separate alliances with Android, Samsung (Tizen) apart from the Windows Phone platform. However, creating a platform with meaningful revenue stream to replace its Wintel franchise is a long shot – something it has not been able to do for a very long time.

Highlights of Intel’s Performance
Full-Year 2012 Key Financial Information and Business Unit Trends
Full-year revenue of $53.3 billion for FY2012
PC Client Group had revenue of $34.3 billion, down 3 percent from 2011.
Data Center Group had revenue of $10.7 billion, up 6 percent from 2011.
Other Intel architecture group had revenue of $4.4 billion, down 13 percent from 2011.
Gross margin of 58% not broken down by group.

I am listing out a few thoughts on the Intel prospects going forward-

1. Intel Versus Qualcomm: Qualcomm with its leadership of the mobile space is possibly Intel’s biggest competitor in the mobile space. What works for Qualcomm is its economies of scale – hence allowing it to price itself very suitably. Intel chips in its current state would be 5X costlier than Qualcomm.
2. Intel’s specialty was the Windows platform and its complete monopoly. I don’t think they can repeat the same success with Google’s Android because the spots are already taken.
3. The low end growth in volumes will be typically driven in low price markets such as India, SE Asia. In this segment, there are pretty strong guerillas such as MTK, Allwinner and even Qualcomm has a spot of bother targeting these segments
• The problem with these markets is that none of them seems to offer the kind of margins that Intel has become accustomed to–even *if* Intel is successful in those markets
4. Either in terms of competing with Qualcomm or finding new markets, If Intel was to beat the market by considerably pricing itself lower (assuming very high volumes) – it would impact its profit margins dearly.
5. Intel has been innovating at the high end of the market. Thus, the cleverness that has gone into Intel’s current generation of high-end processors is simply stunning, but the market that benefits from that cleverness, and the margin that goes with it, is disappearing.
6. The only saving grace to this equation could be Microsoft – but the platform had its share of problems with Windows 8 and I am not sure if Windows Blue can reverse the tide.
7. Intel’s share of the server markets is also under threat with the ARM architecture and Atom like low margin chips being purported to be lopping off a big chunk of the server markets in near future. The driver is the cost of electricity and of cooling data centers. (Low power rules)
8. The third of Intel’s strengths – high-reliability enterprise computing and high-end analytics for business or national security applications is also moving the IBM way. IBM doesnot make any profits on its processors – its makes it dough from the services.

Finally, from cumulative experience of high end technology industry – any incumbent Goliath who missed one technology cycle – cannot by any means play catch up unless it re-invents the whole industry yet again. Intel doesnot have to look too far – beyond Microsoft – to learn missing out a technology cycle and losing the plot.

The 2012 Intel Results
09082013

Apple – Losing its Halo!

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 6, 2013

The Apple board is concerned about its “dry spell” in producing innovative products. Apple has been missing in action for a while – October 23rd, 2012 was the last time, Apple launched the iPad mini. Ever since then the Cupertino giant has been largely missing in action. Twitter and Blogospehere – which was alive and abuzz disecting Apple’s latest launch or new launch have largely falled silent and one gets to read more about Cook versus Jobs comparison which is reminiscent of Apple’s Phoenix tale.

This post is to put Apple’s profiling Apple’s share of problems.

1. iPhone and iPad both played a significant role in its growth since 2009. However there is slowdown in Apple sales and prices have gone southwards for a while now. In other words, loss of momentum. Apple seems to be not only losing its pricing power but also its sales growth despite the lower prices.

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2. Going by Apple’s own statement- the loss in pricing premium and numbers is not just a temporary loss-
“The Company expects its gross margin percentage to be lower in 2013 than experienced in 2012, and the Company anticipates gross margin to be between 36% and 37% during the fourth quarter of 2013. The lower gross margin expected in 2013 is largely due to anticipation of a higher mix of new and innovative products with flat or reduced pricing that have higher cost structures and deliver greater value to customers and anticipated component cost and other cost increases.”
Financials Q3, 2013 (page 30)

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3. The decline in numbers can also hurt the iTunes, software and services, and accessories segments.
4. More importantly, the loss in momentum is showing on its technology leadership – and top of the mind recalls. Apple is suddenly a “has been” from “aspirational” and “ahead of the curve”
5. There have been fiascos such as the Apple Maps which have robbed the sheen and the Halo. Apple was never accussed of being a “half baked device/service”

While it is understood that Apple needs to target the China and the SE Asia markets with its low cost iPhone – iPhone 5C which should take on the mid range Androids and Windows Phones – this would translate in reduction of the overall margins. At the same time, Samsung Galaxy SIII has taken over as the Smartphone tops – disrupting iPhone’s positioning in consumer mind as the best smartphone.

Samsung eating Apple’s Profit pie even as the industry gets hammered

Posted in Device Platforms, Mobile Devices and Company Updates by Manas Ganguly on August 5, 2013

Canaccord genuity in its Q2, 2013 Smartphone value share reinforces the change in guard in the smartphone segment. Samsung seems to be riding on its multi-product Android portfolio to fork into Apple’s pie.

chart-of-the-day-oem-profits

Apple has 53% of industry profits (as against 71% last year) and Samsung has 50% (was 37% last year). Samsung keeps gaining quarter on quarter and Apple keeps loosing. While Samsung and Apple generated $5.2 billion and $4.6 billion, respectively, in handset profits in the second quarter, according to research firm Strategy Analytics. By comparison, the mobile division of LG Electronics Inc., the No. 3 smartphone maker, had a $54 million operating profit with a 5.3% share in the latest quarter.The duopoly stands in stark contrast to the long list of companies jostling to establish themselves as a formidable player, including Nokia Corp., BlackBerry Ltd., Sony and LG. Even fast-growing Chinese manufacturers such as Lenovo Group Ltd., ZTE Corp. and Huawei Technologies Co.—all major brands in the burgeoning Chinese market—have yet to prove that they can deliver consistent profits in smartphones.

Will a combination of iPhone 5S + iPhone 5C (Low end Apple iphone) be able to turn it around for Apple? Samsung currently seems to have awesome momentum and might end of taking the No.1 position in Smartphone profits by Q4, 2013.

What doesnot change is that the rest are truely “laid to rest”. From a consumer perspective, this duopoly can be damaging in terms of choices. Device Makers may start throwing in the towel – What with no profits and cash burns. NEC Japan is quitting business.
HTC has reported a 83% drop in profits.

Can Marissa Mayer save Yahoo! (Part 4): Mobile, Advertisements and Monetization- Mayer still has a point to prove.

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 4, 2013

One place where these hard-core researchers might focus their attention is search. Although Google dominates the space and Yahoo has had Microsoft (MSFT) power its search engine for the last three years, Mayer still believes Yahoo can find new ways to present search results. “Search is far from over,” she says. “It’s physics in the 1600s or biology in the 1800s. There’s miles to go before you get to quantum physics or even a microscope. There’s a lot of that you can do once you have mobile, and we are going to be very focused on the user experience.”

Unlike other mobile powers such as Apple (AAPL), Google, Facebook, Samsung, or Amazon, Yahoo neither controls an operating system nor makes popular hardware devices. And unlike Netflix—or HBO (TWX) or Showtime (CBS), for that matter—it doesn’t own blockbuster shows people are willing to pay to watch. Yahoo’s Weather app may delight design aficionados, but it doesn’t hold a user’s undivided attention the way an episode of Game of Thrones does on HBO Go. Mayer has locked up at least some exclusive content. In April, Yahoo purchased the online rights to old Saturday Night Live clips for an undisclosed amount. She says her strategy is to partner with other players, pushing Yahoo’s licensed content, original shows, and collection of apps to other companies’ hardware. For example, Yahoo makes the default stock-quote application on every iPhone, and Mayer has talked about doing more such deals. The risk is that any company might decide at a moment’s notice to replace Yahoo’s offerings with something else.

Even if its free mobile apps become huge hits, Yahoo has to figure out a way to monetize them. The company is no doubt quietly developing a strategy to advertise within its mobile services, though Mayer will only say she’s focused on developing products that users love. Even there, though, rivals are ahead. Facebook stock rose 30 percent the day after it revealed that 41 percent of its revenue now comes from ads on phones. Although Yahoo doesn’t disclose mobile revenue, Macquarie Securities analyst Benjamin Schachter estimates its mobile ad percentage is well under 10 percent.

For all her credibility with engineers, Mayer is an unknown to Yahoo’s biggest advertisers. “To be out there meeting with clients and advertisers is not her thing,” says Marla Kaplowitz, the chief of media agency MEC North America. As for its products, “Yahoo still needs to be a lot more nimble,” says Kaplowitz, noting that running large ad campaigns across Yahoo’s stable of services is particularly cumbersome.

Yahoo’s revenue topped $7.2 billion in 2008 and has since fallen by almost half. For the last 12 months, sales were $4.8 billion. “I’m not confused; I know we have a lot of work to do,” Mayer says, standing up in the URLs cafe as the FYI session is about to begin. “Up until now, things have gone really well. If you tell me that I’ve got to go back to last July and do it all over again, I’m not sure I could. I was optimistic, but a lot of the progress we have made has surpassed even my expectations.”

By way of explanation she mentions an improbable role model: Sarah Hughes, the American figure skater who competed at the 2002 Winter Olympics in Salt Lake City. “No one thought Sarah Hughes had a chance to win,” she says. Then all the favorites flubbed their routines, and Hughes landed seven spectacular triple jumps and ended up with the gold. “Afterward, Hughes said that she didn’t quite know how she had done it,” Mayer says, “and she wasn’t sure she would ever be able to repeat it. It was the routine of her life.”

It’s an inspirational story that could be interpreted in two ways: Plucky underdog triumphs because of talent or because superior rivals choke. “I feel like Sarah Hughes,” Mayer says. “Actually, I still have her performance saved on my TiVo.”

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Can Marissa Mayer Save Yahoo! (Part III): The Product Focussed Turn-Around

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 4, 2013

Continued from Part II

Cahan’s division, called Mobile and Emerging Products, now exceeds 330 people and has its primary offices in New York, San Francisco, and Sunnyvale, Calif. Underscoring mobile’s importance, Mayer ordered the team’s work space in Sunnyvale renovated. Unlike the soporific purple and beige cubiclevilles that fill the rest of Yahoo’s dot-com-era headquarters, the mobile group has adjustable workstations that let employees sit or stand. There’s an exposed ceiling, whiteboards on every other wall, and big colorful posters that display giant iPhone screens.

The division’s employees also get personal attention from the boss. Mobile engineers describe regular product reviews where Mayer pushes them to move faster and think bigger. She often focuses on individual pixels on the screen and is comfortable letting her instincts trump empirical data. “Just because we have a ruler doesn’t mean we have to measure everything,” she said at one review, according to Lee Parry, senior director in the mobile group and a seven-year Yahoo veteran.

Over the last few months, Cahan, Parry, and their colleagues have released apps for Yahoo Mail, Weather, Fantasy Football, and the Flickr photo-sharing service. They’ve also unveiled the Yahoo news-reading app, which integrates technology from Summly, a startup founded by London teenager Nick D’Aloisio that Yahoo bought in March for $30 million. The app uses Summly’s text-summarizing software to abridge everything from sports game recaps to Mayer’s own quarterly earnings presentations.

Yahoo says that after redesigns, traffic to mobile applications such as Yahoo Mail, Yahoo Weather, and the news app is up 120, 150, and 55 percent, respectively. There are clearly more apps on the way: A large chart on the office wall has a schedule crammed with product launches and suggests that apps for Yahoo Groups and Messenger are in the works. “We know there is going to be skepticism,” Parry says. “The fact that we are already seeing the payoff is giving everyone faith that we’re on the right path. That’s what Marissa is so great at. She’s shining a light and beating a path to the horizon and saying, ‘This is where we are going.’”

There was no shortage of skepticism when Mayer departed Google, her only professional home, for the dismal scene that was Yahoo last summer. A pay package valued at $36.6 million in salary and stock for 2012 alone, according to company filings, was no doubt convincing, but Mayer insists she was passionate about the opportunity. And though she vows to focus an interview on corporate strategy, she can’t resist describing her momentary panic and disappointment when she thought she didn’t get the CEO job.

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Mayer had pursued the position in total secrecy. She had to say the code words “project cardinal” to a limo driver waiting outside her Palo Alto home, who then drove her to a Silicon Valley law firm for a meeting with Yahoo’s board. The board was supposed to call with its decision by 8 p.m. When the hour arrived, she and her husband, investor Zachary Bogue, were at a dinner party, and Mayer was battling the urge to keep checking her phone. “I saw such an opportunity here,” she says, “and felt like I had so many ideas.” She also felt that after 10-plus years at Google, it was time to leave.

At 9:45 p.m., Mayer’s phone was still silent. She was crestfallen and making frantic hand gestures to Bogue that she wanted to leave the party. (Bogue, enjoying his seat next to former San Francisco 49ers quarterback Joe Montana, wanted to stay.) Finally, as they were saying their goodbyes, Mayer got a call from Jim Citrin, a partner at Yahoo’s executive recruitment firm, Spencer Stuart. Propriety demanded she let it go to voice mail. A year later in the Yahoo cafeteria, she taps her iPhone screen and plays it: “Marissa … you should be smiling,” Citrin is saying. “We’re smiling. Call me ASAP.”

Mayer is relentless in her search for other believers. In addition to her mobile hiring spree, she’s begun shifting funds back into Yahoo’s research organization, which previous CEO Thompson gutted in a round of layoffs. She says the lab has a goal of hiring 50 Ph.D.s this year and has already signed up 30.

Continued to Part IV

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Can Marissa Mayer Save Yahoo! (Part II): From Chaos to Marissa Mayer

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 3, 2013

Continued from Part 1

Shareholders are still waiting for the change that really matters: revenue growth in search and display advertising. In the second quarter, Yahoo’s revenue dropped 7 percent from the year before. Meanwhile, Facebook (FB) and Twitter are taking ever larger chunks of everyone’s time; Netflix (NFLX), Hulu, and Amazon.com’s (AMZN) Prime Instant Video service have become online TV networks; and Facebook and Google are carving up the display advertising business. Internet users no longer consume big meals of news and entertainment at a single Web portal—Yahoo’s previous raison d’être. Now they snack on morsels of information from all corners of the Web.

Yahoo timelines

Yahoo executives may have stopped being in denial, but publicly at least, they don’t own up to the long odds. Kathy Savitt, a former Amazon exec and Mayer’s marketing chief, won’t even call her mission a turnaround. “We call it a renaissance,” she says, “because Yahoo is still one of the largest brands in the world.” To Mayer, the emergence of smartphones resets the game in Yahoo’s favor. “What people want on their phones is content. It’s just another way of delivering the Web,” she says. “I’m an optimist. I think all leaders are.”

Mayer decided early that Yahoo’s fortunes were tied to devices. Upon taking the job, she memorized a list of the top things people do on their cell phones and would recite them, unasked, to family and friends: phone calls, texts, e-mails, maps, weather, news, stocks, sports, games, photo sharing, group messaging, celebrity gossip, and financial news. “I remember financial news and stocks were both on there, and that sounded like cheating because they’re kind of the same,” she says.

Yahoo wasn’t going to pursue advances in voice-recognition, texting, or maps—she knew too well the expense associated with such development as well as the distance of Google’s head start—but the rest aligned closely with Yahoo’s most popular services. Yet when she began reorienting the company, Mayer discovered there were only a few dozen engineers working on apps. That’s not because Yahoo was late to the mobile revolution, but because it was too early. A decade ago, Yahoo built a mobile team under a former executive named Marco Boerries. The effort ran into a classic Innovator’s Dilemma: Yahoo’s success was tied to the traditional Web, and the company didn’t want to risk anything that might undermine profits. When Bartz took over as CEO in 2009, Boerries left to start a mobile company in his native Germany, and his group was disbanded. Some engineers were repatriated to their product teams, where they had trouble persuading colleagues to focus on mobile. Almost all are working elsewhere now.

Among Mayer’s top priorities was to reestablish a centralized mobile group. To run the unit she selected Adam Cahan, 41, whose startup, IntoNow, was acquired by Yahoo for around $20 million in 2011. Cahan, like Mayer and many of her lieutenants, is an exuberant dresser. For an interview, he wears gray, linen-covered shoes, a shirt with the top two buttons open, and a stack of bracelets he calls his “man jewelry.” Cahan says his mission is to build the largest software-only mobile development team in the world and to create applications based on Yahoo’s commonly used Web services, such as its Fantasy Football league and the feed of headlines and entertainment news on its home page. It sounds simple enough, but Cahan insists it’s a big change. Before Mayer took over, “there were elements at Yahoo very focused on the mechanics of a quote unquote turnaround,” he says. He argues that it’s a significant shift just to focus on users and build products instead of catering to the balance sheet.

Cahan’s biggest challenge is that engineers who develop mobile apps are young and scarce. Working for a limping giant such as Yahoo is rarely high on their list of personal goals. So Mayer and Cahan have bought talent, spending close to $200 million to acquire at least 18 startups, in addition to blogging network Tumblr for $1.1 billion. In each instance, Yahoo has locked up engineers with two- to four-year contracts and set them loose to build apps and hire more mobile developers, according to two people familiar with Yahoo’s deals who weren’t authorized to speak for the company. Despite the cash, it’s not an easy leap for entrepreneurs to make. “I was really worried,” says Josh Schwarzapel, a senior product manager for mobile whose video chat startup, OnTheAir, was acquired by Yahoo for an undisclosed amount in December. “I had a lot of friends who came in [to Yahoo] and were rejected by the host.”

Continued to Part III

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Can Marissa Mayer Save Yahoo? (Part I): Yahoo Stirring

Posted in Mobile Devices and Company Updates by Manas Ganguly on August 3, 2013

Profiling an interesting account of Yahoo!’s turn around featured by Bloomberg, Businessweek and Economic Times

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Marissa Mayer is sitting in URLs, the Yahoo! (YHOO) cafeteria, making the case for the future of a company that almost everyone in Silicon Valley views as doomed. Employees swarm around her, assembling rows of chairs for the afternoon’s FYI, a new weekly ritual where employees get to lob questions at Mayer and her executive team. It’s been a long July, in which Mayer’s one-year anniversary as chief executive officer was marked with an uninspiring second-quarter earnings report. Mayer prefers to focus on the company’s increase in Web traffic. She won’t give numbers but says it’s enough to erase the entire decline from the previous year. “Name another Internet giant that went through three years of decline and then started to grow again,” she says. “It’s a very good sign.”

When Mayer left her executive role at Google (GOOG), she knew she was taking on what might be the hardest job in the Valley. Yahoo has had a lost decade, laboring under a series of failed product strategies and CEOs. It was a Web directory under founders Jerry Yang and David Filo, then a Web portal under Tim Koogle. Terry Semel made it a tech company with Hollywood pretensions, and, most recently, it languished under Carol Bartz and Scott Thompson as a dot-com relic known mostly for losing its top talent to competitors.

Now Mayer wants to transform it into a media company for the mobile age. She’s refocusing her 11,500-employee company on the kind of personalized, habit-forming content that people view on tablets and phones. That means new kinds of e-mail, messaging, and news applications, tailored to the location-aware and always-on nature of the mobile experience. “I hope that at some point we are looking at a world where mobile is a majority of our revenue,” she says.

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