Yahoo to slash jobs and bet on mobile search as it looks for a suitor

Yahoo said it will slash jobs and hone its focus on mobile search and as it continues to overhaul its core Internet business and look for a buyer.

The company will cut 15 percent of its workforce worldwide and shut down some legacy products and services, emphasizing what it calls "Mavens" -- mobile, video, native and social. And search will continue to be a top priority of Yahoo's mobile efforts, CEO Marissa Mayer said during the company's earnings call.

"As the mobile search market continues to expand and as user behavior shifts more towards contextual search queries, we see mobile search as the biggest opportunity," said Mayer, according to a Seeking Alpha transcript of the call. "As a result, we're shifting our focus toward forward-leaning mobile search investments and thinking through how search should change."

Indeed, the mobile search market is beginning to soar after years of failing to live up to a tremendous amount of hype. Google earlier this week said mobile search played a key role in boosting the company to a record $21.3 billion in revenue during its latest quarter, adding that its search offering for phones had been optimized to deliver more relevant results.

And mobile search still has vast room for improvement, Mayer said. But that will require tighter integration between apps and new business models beyond simple paid placement and pay-per-click.

"It's a complicated (issue), because there's mobile search as it exists today and then there's what mobile search might become in the future," she observed. "So for example, I may want, if you were looking to find somewhere in, say, in downtown San Francisco and it's 6:00 on a Saturday night, it's useful to be able to say, OK, use Yelp, use OpenTable to actually book a reservation and being able to know which -- what applications you have on your phone, deep link to them and really provide a great guidance…. It's something that's quite different and it will monetize differently. The user interaction will be different, and we really think that mobile search needs a much deeper re-imagination."

Yahoo has made mobile a priority for years, of course, but it simply hasn't executed as well as some other Internet companies. Which is why only 23 percent of its revenue stemmed from mobile during its latest quarter, while mobile accounted for a whopping 80 percent of Facebook's revenue. But there's still plenty of opportunity in mobile search. If Yahoo can develop some innovative, valuable products -- and if it doesn't find a suitor -- it has a chance to get back in the mobile search game.

Meanwhile, Yahoo's quest for a willing buyer continues, and several mobile network operators have been mentioned as potential candidates. Analysts have speculated that Verizon, AT&T or Sprint parent SoftBank could pick up the struggling Internet company, moving further into digital media and using their substantial subscriber bases for distribution.

For more:
- see this Yahoo press release

Related articles:
Verizon on hold as Yahoo reportedly plans to lay out strategic vision
Google's success in mobile search ads fuels big holiday quarter
Sprint parent SoftBank considered a potential suitor for Yahoo's Internet business

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