The Risky Yahoo! Inc. Strategy That Steals From Facebook and Google

CEO Marissa Mayer hasn't been shy about shifting Yahoo!'s (NASDAQ: YHOO  ) strategy. First, she cut back on work-at-home options. Then, she shifted focus from display ads to contextual ads and original content. Now, she wants to restrict access to popular services such as Fantasy Sports and Flickr to only those users who've registered with Yahoo! directly. Fool contributor Tim Beyers explains the implications in the following video.

Specifically, Yahoo! will require those who had been logging in via either Facebook (NASDAQ: FB  ) or Google (NASDAQ: GOOGL  ) accounts to have their own Yahoo! profile. The hope? Gain a better understanding of users' habits in context.

It's a big and potentially lucrative move. Under the old system, Yahoo! wouldn't know much beyond a username about a customer arriving from a Google account. Requiring these same users to register with Yahoo! should allow the company to better pair demographic and usage data for smarter contextual advertising.

The risk is in angering users who like the old system, a problem we've seen Yahoo! face before with changes to Mail. A recent breach of its new email system won't help matters, nor will it make it easier to convince users to trust Yahoo! with more of their data. Nevertheless, Tim says the potential upside via smarter advertising is worth the effort.

Now it's your turn to weigh in. What do you think of Yahoo!'s strategy? Will you be getting a distinct profile or do you have one already? Please watch the video to get Tim's full take and then leave a comment to let us know where you stand and whether you would buy, sell, or short Yahoo! stock at current prices.

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  • Report this Comment On March 10, 2014, at 2:07 PM, laethyn wrote:

    Under the old system, Yahoo! wouldn't know much beyond a username about a customer arriving from a Google account.

    I call BS. When you sign in with a 3rd party account, you have a token that is quite trackable.

    This isn't going to help them. Quite the opposite. Everyone I know has already decided to abandon yahoo for another service, rather than create yet another user/pass credential

  • Report this Comment On March 10, 2014, at 4:29 PM, xrocom wrote:

    I would think that with the correct engineers, Yahoo could provide a FB like sharing application for Yahoo’s existing userbase. Since It is easy to log onto Yahoo, a share could be successful if kept simple and very easy and takes the best of FB applications.

    In the past however, for every great applicant that Yahoo bought, their designers turned the app into a user-unfriendly app and far from the original.

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