Yahoo Bets on Flurry Analytics to Grow Mobile Ad Revenue

Yahoo wants to be part of people's daily habits, and Flurry deeply understands people. Yahoo's hope is that more personalized ads will drive revenue.  


Yahoo has purchased mobile analytics firm Flurry, in hopes of improving its mobile advertising revenue.

Flurry helps companies to better understand mobile users—its analytics software is in seven apps on a smartphone, on average—so that they can present them with the most appropriate and personalized ads possible.

With the data it collects from 150 billion app sessions per month, Flurry says it gathers the "deepest understanding of mobile customers," which it helps publishers and developers use to "accelerate revenue and growth."

Yahoo describes its mission as "re-imagining users' habits" by building and supporting beautiful and inspiring mobile apps—which drive revenue via advertising and search.

While Yahoo CEO Marissa Mayer has, over the last two years, cleaned up the company's reputation, attracted new talent, streamlined Yahoo's business practices, increased its user base and improved its core search ad revenues, growing Yahoo's display ad revenue continues to be a challenge. During the company's 2014 second quarter, search revenue grew by 6 percent year-on-year while display ad revenue fell 7 percent.

Scott Burke, Yahoo senior vice president of advertising technology, said in a July 21 statement announcing the deal that Yahoo's mobile traffic growth is the result of "great people and great products," and Flurry's success has come thanks to the "committed investment" of its passionate team and their "indispensable platform" for developers.

"We want to harness our collective innovative spirit," Burke said, "and bolster the mobile ecosystem by providing developers the analytics and monetization solutions to drive their success."

Yahoo didn't share the terms of the deal, though a source told The Wall Street Journal that Yahoo paid more than $200 million for Flurry. If true, the acquisition is one of Yahoo's largest. During Mayer's first year on the job alone, she led the purchase of at least 17 companies, one of which—and still the priciest—was the acquisition of Tumblr for $1.1 billion.

A Focus on Developers

When the economy tanked six years ago, Flurry started working with app developers—"the crazy ones, the misfits, the rebels, the troublemakers," Flurry CEO Simon Khalaf said a July 21 blog post. It was a different time, and not an easy one.

"Today, the story is quite different," Khalaf went on, writing that 170,000 developers now use the Flurry platform for analytics and collectively they have more than 540,000 apps on the platform.

Khalaf described an industry that's today wide open with opportunities for developers. Mobile gaming, he said, is still only 14 percent of the $93 billion gaming software industry, and mobile payments today account for less than 1 percent of the $157 billion North American payments market and just as little of the $325 trillion U.S. retail industry.

"With Yahoo," Khalaf said, "we will have access to more resources to speed up the delivery of great products that can help app developers build better apps, reach the right users for their apps and, more importantly, make money from ads that look great and blend into the app experience."

Yahoo shared during its July 15 earnings call that the average amount of time users spend on mobile devices has increased 79 percent over the last year, and that of the time Yahoo users spend on their phones, 86 percent is spent in mobile apps.

Year-over-year, Yahoo's social, mobile, video and native areas collectively grew 90 percent, Mayer said, after noting that revenue growth is Yahoo's top priority and she was "not satisfied" with the quarter's overall results.

"I believe we can and will do better moving forward," said Mayer.

Flurry is based in San Francisco and has offices in New York, London, Chicago and Mumbai. Yahoo said the Flurry teams will remain where they are, and "Flurry's vision, mission and focus will stay the same," with Yahoo's support and investment.

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