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Resuscitating Yahoo! Inc. Won’t Be Easy, But Is Possible

Yahoo! Inc. (NASDAQ:YHOO) certainly has some advantages in it. The CEO, Marissa Mayer, has over the past three years sought to acquire several properties that she deems useful for the company’s turnaround. However, the long-term durability of Yahoo’s advantages, real or perceived, is questionable at best.

As Yahoo continues to lag behind in hot trends like mobile, the company is not only leaving money on the table currently but also eroding its existing advantages. That can be seen in the way some of Yahoo’s popular Web properties are continuously fading in popularity and usage.

Inability to implement mobile experience costing Yahoo

Yahoo may have itself to blame for most of the troubles it is facing. The company has been witnessing the rise of mobile, with itself being active in mobile analytics through Flurry. However, you can see that Yahoo has done very little, if anything, to bring mobile experience to its traditional Web properties.

The failure by Yahoo to connect its Web services to mobile applications has led its once popular services to become less relevant. Web experiences like Yahoo Mail, Yahoo Finance and Yahoo Sports have these days become only a pale shadow of their former selves.

Under Mayer, Yahoo has been able to acquire a number of mobile assets, but the world is still waiting to see the impact of these acquisitions on Yahoo’s financial results.

Digital advertising dollar escaping Yahoo

Marketers once flocked to Yahoo! Inc. (NASDAQ:YHOO) to get the attention of Web users. But Yahoo has continued to lose its share of the digital advertising market. Both Yahoo’s Display and Search ad businesses are not doing as well as one would expect. The likes of Facebook Inc (NASDAQ:NASDAQ:FB) and Twitter Inc (NYSE:NYSE:TWTR) are actively eating up Yahoo’s slice of the pie in the online advertising space.

There are several reasons Yahoo is losing out in the digital ad market. Part of the reason is that the company has not been able to innovate as fast as its competitors. Social networking companies like Facebook have been able to harness rich data on their platform to present advertisers with better advertising solutions, which Yahoo cannot match.

For example, the rich user data from social networks enables marketers to properly target their digital campaigns. Therefore, as long as...