The most popular acquisitions of our generation include Google acquiring YouTube back in 2006 and Facebook buying Instagram in 2012. However Marissa Mayer, Yahoo’s CEO since 2012, has gone on quite the spending spree with several acquisitions intended to breathe new life into the company. In fact, Yahoo has engaged in about thirty acquisitions since Mayer jumped on board. This comes as a surprise to many as Yahoo has a history of failed acquisitions, Flickr being the most known. We’ll examine a few companies now under Yahoo’s wing and what small businesses just like yours can learn from the acquisitions.
Lesson 1:The Value of Credibility- and How to Build It
Case Study: Tumblr: Acquired by Yahoo in May 2013
One of the more well-known from the list of acquisitions, Yahoo bought Tumblr for $1.1 billion. A website based on a microblogging platform, it launched in 2007 and gained around 75,000 users in its first two weeks. After successful funding from investors, in 2012 they began running paid advertising, resulting in $13 million in revenue. What is unique about this acquisition is Tumblr is operating as an independent separate business run by the current CEO David Karp. Yahoo is letting Tumblr be Tumblr and helping them gain revenue with their advertising resources.
Tumblr’s success in its first ten years is mostly due to its wide user base and increasing social network environment—especially in the mobile app market. Yahoo, on the other hand, is one of the original big internet companies lacking in social-network capabilities. You do the math. Social media companies are hot in the market for big technology companies like Yahoo looking to gain an edge on competitors (i.e. Google).
Tumblr established credibility by being home to the creation of the “We are the 99%” slogan in a blog created on the website. Tumblr’s list of popular blog posts will help Yahoo’s massive research engine data determine what is trending news—a service Yahoo didn’t know they would need.
A small business that can stand on its own but can open important new doors for someone else has immense value. Tips for small businesses looking to get noticed would be to keep your website up-to-date with a featured success story, post testimonials from happy clients, or ask users to write a review on Yelp. Credibility creates reliability and reliability will give your business consistent results and growth.
1 Lesson 2:The Importance of Having a Vision and Great Messaging
Case Study: Aviate – Acquired by Yahoo in January 2014
Yahoo’s first acquisition of the New Year was Aviate, an intelligent homescreen service for Android smartphones that simplifieshow users view their apps in a personalized way. Launched in beta October 2013, Aviate was welcomed with positive reviews and a promising future. That future involved being acquired by Yahoo to play a key role in the company’s Android products.
The official acquiring price was never confirmed (rumored at $80 million), but Aviate will prove to be a very useful asset for Yahoo at whatever price. Google acquired Android back in 2005 and has seen massive growth since then. Yahoo acquired this service, giving them the opportunity to vastly improve the capabilities of a smartphone and essentially make it, well, smarter. This may give them a competitive edge over Google—which is known for creating innovations that make the lives of its users simpler.
What helped Aviate capture Yahoo’s attention is its similar vision. Aviate is about “simplifying and streamlining user’s daily habits through intelligent products,” and Yahoo is founded on that same principle, with multiple applications including: Yahoo Mail, Messenger, News, and Finance (thenextweb.com). Converting what Yahoo already has to a smartphone marketplace is exactly what Yahoo needs to grow even further. Sharing a common goal can go a long way in attracting the right people for small businesses.
If your business has a vision, a mission statement, or even a sales message, share it, make it known to your users and help them understand what your company is all about and win more customers. A statement with a sentence or two is the usual model but go ahead and word it in a way that even a twelve-year old would understand. The simpler the better. Here are examples on how to use this model to improve a sales message (inc.com):
Before: “We provide a collaborative environment where multiple teams can move sales documents through a workload chain.”
After: “[We] take half as much time to get a sales proposal written and approved.”
Before: “Our sales enablement platform represents customer environments and decision
makers through an easy-to-use, point-and-click GUI.”
After: “You’ve got a map showing who’s important at the customer site, who they work
for, why they’re involved in making decisions, and how to get them on board.”
By simplifying your message, you’ll make it easier for others who share your vision to react to what you’re saying and engage with you.
1 Lesson 3: Creating Popularity With Exclusivity
Case Study: Vizify – Acquired by Yahoo in March 2014
This deal for Yahoo was in the works for a while and again shows Mayer is acquiring the tools that could take Yahoo to a completely new direction. Vizify focused on visualizing data in a fun new way. It turns your social media data into infographics, videos, and other features. Founded in June 2012, the website launched a little over a year later as an invite-only service, gaining a lot of initial press. They were the subject of even more hype after partnering with Twitter at end of 2012. Though there are no specifics yet on how Vizify’s visual data will be incorporated into Yahoo, they are sure to bring a more ‘visual approach’ to the company (vizify.com).
Like Aviate’s conversations with Yahoo, Vizify shared approval with Yahoo’s views on improving user experience by visualizing information—an innovative way to see the information we post daily on social media. The growing popularity of infographics to convey information online and on social networks like Pinterest and Twitter will only grow even more with the millions of Yahoo users.
It’s well worth noting one of Vizify’s strategies that may have contributed to its success. Similar to many successful startups and businesses online including Pinterest and Spotify, Vizify began as an invite-only website and users were invited to contact the founders of the company directly with feedback, ideas, or requests for updates or changes. An invite-only launch for an online service sends a vibe of exclusivity (just as it does for a physical location). If that launch experience is successful and receives positive feedback, it will only make others want to join the party even more. Getting this kind of buzz is a big way to get you noticed.
What can small business and startups do to incorporate this strategy for success? Consider creating a private event at your business (whether online or on-site) and only invite a select group of people (and offer to let them bring a plus one). For example, invite those who live within a certain mile radius from the store, those that have clicked on your ads online, or who followed you on twitter to come in and be taste testers for your latest cupcake flavors. Before they leave, invite them to join your mailing list and offer them a voucher to come back.
Whether your company is looking to grow or just get some new faces through the door, taking a minute to learn from what these startups did to get noticed can help your small business in a big way. Sometimes the smallest of changes to a message can instantly double your sales and a quick marketing campaign like an intimate private event can do the trick.
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