Apple should buy Yahoo.
This is neither a new idea, nor one acceptable to the Apple fan base. But since people briefly talked about it last year, it’s become an increasingly good idea — maybe a necessary one for Apple’s continued growth and success — and I’m going to tell you why.
Apple’s Missing Social Sites
When Google announced Android Wear, they did so on their own blogging platform, Blogger, and also on their own social network, Google+. The Google+ announcement happened in the place where the company can and will build a community around the product.
When Facebook announced the acquisition of Ocular VR, they announced it on Facebook, of course. And, naturally, future Oculus fans will engage on Facebook as the centerpiece for whatever Facebook does with the virtual reality platform.
When Apple wanted to create community around its iPhone 5c product line, it did so on its own social site where Apple and iPhone fans gather to exchange stories, information and ideas around their iPhone 5c fandom — post pictures, recommend apps and get to know each other over their shared passion.
Just kidding. Apple doesn’t have a social site.
Apple did it on Tumblr, which is owned by Yahoo.
Product announcements and marketing has moved away from press releases and toward social networks. But Apple doesn’t have one.
No Place For Selfies
The human race has become consumed in recent years by the need to use their smartphones to photograph everything in sight — especially their own duck-faced visages — and upload them to social media.
With the worlds top-selling handset, which happens to have one of the world’s best smartphone cameras and camera software, Apple is poised to be the best overall platform for selfies and other smartphone photos.
What do people do? They install the Instagram app, or upload straight to Facebook. Both these social sites ruin photographs with shitty filters, overly aggressive compression and awkward cropping.
All Apple’s efforts in creating a high-quality photo system are rendered useless.
Of course, the minority who post on Google+, which doesn’t compress photos, but does apply subtle changes to the pictures that improves them, would be nice. But Apple’s at war with Google.
If only there was a social photo sharing site where both professional photographers and knowledgeable and enthusiastic amateur photographers already gather and that already has millions of users existed — that would be a great place for Apple to send iPhone pictures by default.
Oh, wait. There is such a place: Flickr, which is owned by Yahoo.
Of Eyeballs and Data
Of course, Apple is relatively cautious about acquisitions, and tends to do so only when necessary. There are certain kinds of initiatives that just take too long or require expertise not easily hired.
One of the things that takes a long time is building up users on a social network. It took Facebook ten years, Twitter eight years and Google+ nearly three years to gain the users they’ve got.
If Apple is to have a significant social presence, they can’t start from scratch at this point. It’s too late for that.
Apple has mostly burned its bridge to Google+ and, in any event, that network has become over-run by Android love and Apple hate that it’s a toxic culture for Apple to enter at this point. (As a Cult of Mac columnist who practically lives on Google+, I see this anti-Apple tendency every week.)
Bottom line: Apple needs eyeballs. And user data. And Yahoo has both. In fact, the only company that comes close to Google in the number of desktop eyeballs attracted each month is Yahoo, which until this week was the number-one attractor.
That’s vague, so let’s get specific. Google attracted 187 million unique visitors last month. Yahoo’s got 183 million. Runners up were Microsoft with 162 million and Facebook with 133 million.
Apple brought in nearly 64 million — significantly fewer people than AOL, Glam Media or The Weather Company.
But, wow, what could Apple accomplish with more traffic than Facebook?
It’s also worth pointing out that Apple is a laggard in the harvesting of user data. Which is great, if you’re a privacy enthusiast, which hardly anyone really is. What people really want is a better Siri, as well as a tiny number of ads that hawk exactly the products and services we really want. Both those desires can be satisfied only with user-data harvesting. And I Apple has demonstrated that we can trust the company with our personal data.
Why Buy Yahoo?
Acquiring Yahoo would bring Apple amazing attention and traffic, social sites Apple could control, high-quality destinations for the high-quality pictures and videos that Apple’s high-quality products enable people to generate, better social signals and the ability to make more money from fewer ads.
It’s also worth noting that Yahoo has been working for some time on the (time consuming) process of building a content-creation engine, having hired broadcasters, writers and editors from major mainstream media outlets, and has also been working on the poaching of YouTube stars for a possible upcoming alternative to YouTube. All this would be a nice and exclusive addition to Apple’s offering in the streaming TV space in an increasingly hot space.
I also think Yahoo CEO Marissa Mayer would make a great addition to the executive staff at Apple. One reason for Apple’s slowness in embracing big data, social and content may be that nobody at the top of Apple is super experienced in those areas, as Mayer is.
Yahoo’s market cap is under $37 billion, which Apple could manage easily from cash on hand.
I think there’s no getting around the fact that acquiring Yahoo would fill in all of Apple’s gaps and place the company in a position to more easily continue the growth trajectory it’s enjoyed over the past five years.
Because at some point, Apple is going to run out of people willing to buy Apple’s high-margin phones, tablets, laptops and computers. And the best way forward for Apple as a business is to own more of the things people do with those products — and in doing so, dramatically improve the user experience.
But here’s the shocking thing, if you think about it. Buying Yahoo sounds at first like it would make Apple less like Apple. But in fact, it would make Apple more like Apple.
Apple’s core attributes are:
- Emphasize great user experience above all
- Assure great user experience by controlling as much of the stuff people do on Apple products as possible
- Drive growth by monetizing as many aspects of the user experience as possible.
Apple with Yahoo would serve these core attributes far more than Apple without Yahoo.
There is simply no getting around the clear benefits of Apple buying Yahoo.