Checking Into Foursquare? Yahoo’s CFO Talks About Next Mobile M&A — Including Importance of “Localization.”
I always like to listen to the dulcet tones of Yahoo CFO Ken Goldman, especially when he talks about what’s next for Yahoo.
That’s because the last time he appeared at an investor conference, the Boston-accented exec zeroed into the need for the Silicon Valley Internet giant to aim at a younger demographic.
Soon enough, Yahoo had scooped up one of the Internet’s most obvious youth plays, Tumblr, for $1.1 billion in cash.
That’s why I tuned in tonight to listen to a replay of his appearance at a tech investor conference held by Bank of America/Merrill Lynch yesterday in San Francisco, where Goldman did not disappoint in delivering some interesting tea leaves to read.
And what struck me most were his words around the continued interest Yahoo has in mobile, including possible acquisitions.
While he again talked in general about how Yahoo was no longer the M&A anathema it had been before the arrival of CEO Marissa Mayer — “companies did not necessarily want to be acquired by Yahoo” — he firmly noted that “now when find something interesting, we actually go and address it and acquire it, rather than thinking about it.”
Goldman added that Yahoo would continue to do acquisitions, “to help basically accelerate our progress … and continue to see the velocity of products in the mobile space.”
Of most interest is “localization of the space,” especially in providing search and content to consumers.
Hey, Dennis Crowley of Foursquare, that sounds like you! Indeed, the famous local New York-based check-in service and its telegenic founder Crowley have always been a favorite of Mayer, including an interest in buying the company when she was an exec at Google, which never came to pass, for various reasons.
(In a coincidence, the founder of the famous local check-in company happened be in San Francisco yesterday, checking in last night at the Tempest Bar near Foursquare’s offices.)
As many worried about its prospects of late — its user base last year was only 30 million, although it powers location information for big sites like Instagram — Foursquare recently did a $41 million financing with help from the powerful Silver Lake private equity firm, which valued the company at $600 million. Other current investors who also participated in the transaction, which also included convertible debt, were Andreessen Horowitz, Union Square Ventures, O’Reilly AlphaTech Ventures and Spark Capital.
While that seems to have staved off sales talk around Foursquare, it’s certainly within the realm of possibility that Yahoo would be contemplating a company just like it, as it continues to actively survey the landscape. That’s especially true given that Foursquare’s laudable but exhausting efforts to monetize need some serious turbocharging that Yahoo could certainly provide.
Much like Tumblr, Foursquare has struggled to realize its business aims — in its case, to make money from selling mobile advertising using its rich local search and robust user location information. (The company had about $2 million of revenue last year, according to a number of reports.)
Foursquare has certainly been inventive in its efforts, including a terrific “Game of Cones” campaign that somehow mashed up HBO’s hit cable show with ice cream (Winter is coming in summer, perhaps?).
While it’s just my humble opinion for now, advertising, search and content combined, of course, is directly in Yahoo’s wheelhouse, as well as Mayer’s.
Back to Goldman: “We’re not afraid to make any decisions,” he said, noting that Yahoo has a regular routine of reviewing a number of deals. “It comes back to what’s our strategy and focus and what do we need to accelerate our progress … we have to see a fit.”
In other tidbits, Goldman noted that Yahoo was working more “collaboratively” with its Chinese bank — oops, investment — Alibaba Group, which is preparing to go public at the end of this year, or early next year.
The huge pile of money Yahoo has made off its initial $1 billion investment by co-founder Jerry Yang has been what has given current management its comfy cushion to remake the company, and has also goosed its stock.
Regarding Alibaba’s IPO, after which Yahoo will be getting another multibillion-dollar slug of dough, Goldman added that “there are mechanisms in place to ensure it is a fair process to all parties.”
He noted, too, that he had joined the board of Yahoo’s other Asian investment, in Yahoo Japan, and would be at its next meeting. Yahoo has previously contemplated selling that asset, too, but has seemed to have tabled that effort under Goldman and Mayer.
You can listen to Goldman’s talk at the investor conference in its entirety here.