Yahoo Partners With Yelp to Boost Search

By Larry Darrell on Mar 13, 2014 at 7:33 am EST


Yahoo Inc. (YHOO) and Yelp Inc. (YELP) strike a partnership, in which the latter’s data will be displayed in Yahoo’s search

Yahoo! Inc. (YHOO) on Wednesday announced that the company had made an agreement with the business review website, Yelp Inc. (YELP) in an attempt to bolster its search product.

The move is another attempt by CEO Marissa Mayerto make Yahoo’s search engine more relevant against increased competition from Google (GOOG) and Microsoft’s (MSFT) Bing.

Yahoo’s integration with Yelp is supposed to provide users with a better search experience, and at the same time, will bring Yahoo somewhat up to speed with regards to third-party data integration. The company is a laggard when it comes to striking agreements with third-parties regarding data partnerships, and even the idea to partner with Yelp is not novel, as Bing has already struck a similar deal with Yelp. However, Yahoo’s association with the website will likely help Yahoo to boost its search results, which will be independent of how Bing fares from its respective partnership.

So, How has Yahoo been losing its streak?

Yahoo, which was once a leader among search engines, took a ‘great fall’ in the last decade or so. According to eMarketer - which researches digital marketing trends - Yahoo’s share in US digital advertisements fell from 15% in 2009 to less than 8% in 2013. ComScore reported that Yahoo now has a 10.8% share in the US search market, about 50% lower than the levels recorded in 2008. The company’s market share in 2013 is relatively insignificant when compared with Google’s market share of 67% in the same time.

The beleaguered web portal, which has seen many changes in its leadership in the last five years, is now trying to enrich its search experience in a market currently dominated by Google and Bing. Google’s former first lady, Marissa Mayer, was appointed CEO of the company in July 2012, and she has been leading a turnaround by revamping products, focusing on mobile apps, striking partnerships, acquiring talent and technologies, and by getting rid of the old guard. Her recent negotiation with Yelp is yet another attempt to prop up the company’s shaky recovery.

Integration is the thing in the industry

The internet space has been thriving as of late, and the news flow is dominated by reports of acquisitions, mergers, integrations, and partnerships. Earlier this year, the Russian search giant, Yandex (YNDX) partnered with social media giant Facebook (FB) and now, Facebook’s public data will be displayed in Yandex’s search results, thereby enriching Yandex's searches and Facebook's global reach.

Google, which is consistently trying to increase its global share in the search market, has also been constantly improving its search function. Recently, it introduced the ‘show me the menu’ search, which allows users to directly access menus of many restaurants, and this feature is likely to attract even more consumers to Google.

Chinese companies have also been increasingly partnering with ecommerce and social media giants and are reportedly signing similar deals. Alibaba, China's largest e-commerce company has integrated its payment systems with Sina's (SINA) twitter-like service Weibo, allowing users to directly purchase and make payments. Another company, Tencent Holdings (TCEHY) has bought a 15% stake in China's second-biggest e-commerce platform

Yahoo’s Future

Marissa Mayer’s time at Yahoo can be characterized with acquisitions and partnerships left, right, and center as she continues to plow through with her plans to not only have Yahoo catch up with  its competitors, but to also outpace them in some arenas in the near future. Mayer has revamped many of Yahoo’s product offerings, and has led to new product integrations, which we believe may have the potential to bear fruit in the future.

Yelp saw its stock price edge up 3.10% yesterday, on the news of the company’s agreement with Yahoo, while Yahoo was off a fraction but is up 1.73% in pre-market trading.

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