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Yahoo is so far behind Facebook on mobile

Mike Murphy
By Mike Murphy

Technology editor

Last week, Facebook announced on its earnings call that 80% of its revenue now comes from mobile users. In four years, the social network has created a $13 billion mobile business. At Yahoo, however, the picture is quite the opposite: Today, Yahoo announced its fourth-quarter earnings, pulling in $1.3 billon in revenue for the quarter. But only $291 million—about 23%—came from mobile.

Although CEO Marissa Mayer has previously said Yahoo is the world’s third-largest mobile advertising company, with roughly 575 million users visiting its mobile properties, it seems to be having trouble translating that base into revenue, at least compared with other mobile advertising businesses. In the last quarter of 2015, Facebook made roughly $4.5 billion in revenue from mobile advertising—roughly 15 times what Yahoo made in the same period. Facebook was founded in 2004—nine years after Yahoo. (Google, which as a search engine might be a better comparison for Yahoo, doesn’t break out mobile revenue.)

Mobile is one of the key areas that Mayer plans to grow as she tries to turn the company around, and on today’s earnings call, she suggested that the company will double down on its mobile search efforts, even as it trims down the company. Yahoo announced that it’s cutting 15% of its workforce, and on the call Mayer said the company is about 34% smaller than it was five years ago.

While its mobile business is growing—its mobile revenue, while small, was up 15% from the same quarter last year—it remains to be seen whether Yahoo will be able to rebound as the internet becomes increasingly mobile. Responding to an analyst’s question on how to compete with giants like Google on mobile search, Mayer said the answer on mobile might be to provide simpler, more personalized results than what you might find on a desktop search. Rather like a guide for the internet.

“A simplified Yahoo will yield better results,” Mayer said.

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