Of the many announcements made at Apple’s recent Worldwide Developers Conference, one that did not garner as much attention concerned the pre-installed weather app on the iPhone.
The look, feel and data has been provided to Apple by Yahoo for many years, part of a deal that sends a lot of traffic back to the Internet portal and spurs a multitude of downloads of its own handsome weather app. So attractive, in fact, that the refurbishment of it was much touted by CEO Marissa Mayer and was well received by reviewers and users. The kudos were much deserved.
But in the fall, Yahoo’s weather relationship with Apple will be blown off the device, a development that is a big miss for Mayer, who has aggressively pushed the company’s mobile efforts as a key part of Yahoo’s turnaround.
The situation Yahoo finds itself in is due to a very crafty deal engineered by former Yahoo board member and Weather Channel CEO David Kenny, who has essentially shoved Yahoo off the key smartphone to be replaced by a new offering that he has been developing since he took over the weather news and information service last year. With it, he has unseated Yahoo from its important perch.
The irony? Yahoo’s weather app and services have long been powered by the Weather Channel, part of a longtime partnership it has had with the Silicon Valley Internet giant. In simple terms, Yahoo had slapped a pretty chrome cover on it and Weather Channel provided the more substantive back end and critical weather data.
To convince Apple to make the shift and cut Yahoo out of the middle, the Weather Channel added a lot more technology and information to the offering that it does not provide to Yahoo. That includes more weather specificity related to the location of a user, a nine-day forecast (up from five), a weather-conditions summary and more.
“Yahoo had been renting ocean-front property for years and did not realize the lease was up, and the Weather Channel slipped right in and took it,” said a Yahoo exec, who said the company acted too late to save the deal. “It’s a high-profile loss.”
Indeed, while Yahoo has said it has more than 400 million mobile monthly active users, a lot of them come from such deals with smartphone makers. While they make no money, largely because they have no ads attached to them, they do provide a lot of traffic back to Yahoo properties.
Unlike Apple, Google, Microsoft and now Amazon, Yahoo has no smartphone offering and must rely on creating compelling apps on those platforms where most consumers increasingly get their information.
What some inside the company are worried about next is the fate of the stock app it also provides to Apple’s mobile device, which some think could be next to go in favor of other providers such as Bloomberg, CNBC or Reuters.
“Others now see an in,” said one person with knowledge of the situation. “Getting on these key mobile platforms is a must-have for Yahoo, since it does not have a phone, and now that status is vulnerable.” As with the weather app, Yahoo gets a lot of its data for the stock app from others, too.
The loss of the weather app on the iPhone is in direct conflict with Mayer’s efforts to get Yahoo more integrated with Apple products. She has been angling to get Yahoo’s search offerings in its devices, as well as others, to expand its iOS partnership.
Not so much, it seems. In its recent WWDC announcement, Apple replaced Google as the search provider for its Spotlight feature in favor of Microsoft’s Bing. Another irony: Mayer has been seeking to improve the company’s search offerings, despite a partnership with Microsoft.
It’s an area she knows well from her many years in charge of product development in that arena at Google. Her aim: To move Yahoo squarely into competition with both Google and Microsoft in an attempt to regain control over a key revenue stream.
To do so, she ordered up two under-the-radar initiatives — Fast Break and Curveball — to get the company back into algorithmic search as well as search advertising.
Sources said the plan is part of a contemplation of how Yahoo can accelerate the end of — or actually end — its longterm search and advertising deal with Microsoft.
But rather than focusing on the Web and keywords, which Yahoo is contractually bound to allow Microsoft to serve under a 10-year search and advertising partnership deal, Mayer is aiming all this toward mobile and contextual search.
As Mayer has often said — and quite correctly — mobile growth and innovation is key to Yahoo. But as the weather kerfuffle shows, it’s just a lot harder to execute than declare.
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