Can Verizon deal revive Yahoo, expand jobs in India?

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Most of us who thronged cyber cafes in the late 1990s and a little into 2000s for surfing the internet, checking emails, night-long chats and online dating (for some lucky souls, though) can never forget the initiation into the World Wide Web, thanks to Yahoo.

Yahoo Mail and Messenger were once the gospel for all — be it teenagers, parents or teachers. Social media was yet to penetrate into our lives and the Yahoo portal alone — once valued at $125 billion during the peak of the dot com revolution — brought us into a world we still cherish with much nostalgia.

That US wireless communications service provider Verizon bought Yahoo’s tottering internet business for a mere $4.8 billion definitely signals an end of an era. But is the move a little sunshine in the cloud for Yahoo?

“It is definitely a move to come up to the stature of Facebook and Google in the digital space but not desktops, specifically. End points don’t decide on the strategy nowadays and mobile, still to some extent, is relevant though. Unfortunately, telcom companies globally haven’t been able to make an impressive mark in the digital space beyond that of an enabler,” explained Faisal Kawoosa, Lead Analyst with CyberMedia Research (CMR), a market research firm.

“So it will be difficult for Verizon to grow big with such a legacy of telcos,” Kawoosa told IANS.

However, according to experts, the viable option for Verizon is now to marry online Yahoo assets with AOL, which it acquired last year for $4.4 billion. AOL has properties like The Huffington Post and technology websites Techcrunch and Engadget — and now Yahoo Finance — which together can become a strong digital advertising platform for Verizon.

Combining these operations — and its own operations — may make Verizon stand next to internet behemoths like Google and Facebook.

“The Yahoo acquisition will lead Verizon to firm up its operations in the digital ad space. Verizon will surely monetize both Yahoo and AOL operations to get the best out of this deal,” Vishal Tripathi, Research Director at global market consultancy firm Gartner, told IANS.

According to Kawoosa, another challenge now is that with Verizon’s acquisition, Yahoo becomes strong but only to a specific geography. He is not sure how it is going to compliment Yahoo’s global image.

“Apparently, the only synergy coming out is taking Yahoo services to a huge Verizon base but whether it will work significantly is yet to be seen,” Kawoosa said.

Is there any take-away for India here?

“The deal comes as good news for the talented Indian IT workforce. It will surely lead to more jobs at Yahoo facilities in the country as once the consolidation is done, Verizon will expand its businesses and India, which has a huge young consumer base, cannot be ignored,” Tripathi added.

Verizon’s main centre in Chennai and offices in Hyderabad and Bengaluru work towards providing voice and wireless communication solutions, data and the like. Yahoo’s downsized Bengaluru centre looks after its websites and digital ad platforms. There is no research and development work happening now.

Following the sale of its internet business, Yahoo will be left with its $41 billion stake in Chinese e-commerce company Alibaba, as well as Yahoo Japan.

Photo-sharing website Flickr and the slowly growing microblogging and social networking website Tumblr are two Yahoo assets that show some promise for growth.

“Verizon has now got Tumblr, Flickr, Yahoo Sports and Yahoo News. With the consolidation, the deal may prove to be a sweet one for Verizon,” Tripathi said.

This month, Yahoo Mail introduced several new updates for iOS and Android operating platforms that are focused on allowing users to add a personal touch to their inbox. The new iOS and Android features are available in India too.

Yahoo Messenger will now support Hindi and five other non-English languages in order to help bridge the language gap and create personalised experiences for its users.

With the Verizon deal, the once-great Yahoo has a revival chance but for Kawoosa, “one can only offer services and can’t force users to make it their preferred choice”, especially at a time when internet usage is going through a massive churning and the spurt of smartphones and social media has changed the online habits of people.

“It’s important to me to see Yahoo into its next chapter,” wrote CEO Marissa Mayer in a mail sent to Yahoo employees after the deal.

The world is interested too as Verizon has some really long distance to cover.

Nishant Arora / IANS