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Alice Truong/Quartz
Back to the drawing board.
IF YOU BUILD IT

Marissa Mayer is confident that Yahoo is finally catching up in mobile

By Alice Truong

Deputy editor

Yahoo CEO Marissa Mayer is banking on mobile to turn the company around. Since she joined, the company has ramped up its mobile team from 50 to 500 people and refreshed a number of its apps—Weather, Sports, and Games—to rave reviews. But now the focus is on courting app developers to build on its platform.

At its first mobile developer conference yesterday, Yahoo debuted a new suite of tools for building, distributing, and making money from apps. Essentially, the company has set up an app development pipeline, and what it needs now are more apps.

“If we think we can help developers make apps better, everyone wins,” Mayer said at the conference.

Key to luring developers over is Flurry, an analytics startup that Yahoo picked up last July for a reported $300 million. Undoubtedly the star of yesterday’s show, Flurry is ubiquitous in the mobile world, with a view into roughly seven to 10 apps on the average smartphone. (Flurry’s software tells developers things like how many people are using their apps and what they’re doing.) Overall, it’s collecting data on 630,000 apps, reaching 1.6 billion devices globally.

Flurry’s latest enhancements make it easy for developers to gain complex insights into their apps’ performance beyond user demographics, device, or time spent. The thinking behind this is that better apps—with analytics and insights driving improvement, instead of just guessing what’s working—will lead to more traffic and ultimately more ad revenue. Yahoo, of course, wants to play a role in generating that revenue, too, through its mobile advertising programs. (Of that money, 60% of goes to developers, with Yahoo pocketing the rest.)

“It’s a virtuous cycle,” Mayer said. And she should know—Google, where Mayer was an early employee and long-time executive, has been very successful on the web with its combination of free analytics software and ad-revenue sharing. (Google’s “network” business generated almost $14 billion last year.)

For what it’s worth, Yahoo’s native ads are a big leap forward from traditional mobile advertisements, which are often tiny and unattractive. “The ads suck less,” Adam Cahan, senior vice president of mobile and emerging products, declared boastfully. But he was careful to note there’s still room for improvement. “Seriously, when we started this, monetization within mobile was [to] take a desktop display ad and then shrink it down.”

So far, Mayer thinks her strategy is paying off, citing $1.2 billion in gross mobile revenue last year. ”Yahoo really fell behind the times in evolution of mobile,” she said. “I feel really confident that we caught up.”

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