Yahoo’s Perfect Opportunity to Cash-In On More Diverse Audiences

Marissa Mayer

Yahoo’s CEO Marissa Mayer. Photo courtesy of Wikimedia Commons.

With the sale of half its stake in Alibaba, China’s largest e-commerce company, Yahoo stands to reap up to $8 billion that the internet giant can add to the $3.5 billion in cash it already has on hand. Media watchers are salivating over what Yahoo plans to do with all of that money.

Jeremy Quittner at Inc. Magazine speculates that Yahoo could buy back shares to prop up its own stock price, issue dividends to shareholders, or the tech media company could soon be on another buying spree. In its push to become profitable, Yahoo has made several high-profile content buys including paying $1.1 billion for the social media platform, Tumblr, a year ago and hiring veteran newswoman Katie Couric in November. Yahoo also bought data visualization firm, Vizify, for an undisclosed sum.

Inc.’s Quittner reports Yahoo may be interested in buying popular news startups such as Buzzfeed, Nowthis News and Recode, or social media networks Pinterest or Yelp. That’s all well and good, but Yahoo’s expected windfall also represents an opportunity for the aging internet company to not only diversify its content offerings, but deepen its reach into more diverse markets.  While NBC Universal and AOL Huffington Post acquired portals that reach deeply into Hispanic and African American markets, Yahoo has no such product.

According to the Inc. report, Michael Yang of SanFrancisco-based Comcast Ventures and former Yahoo employee said: “Yahoo is looking at how to increase reach or audience, and monetization or yield on monetization.” What better way than by acquiring startups that narrow-cast to diverse and growing user bases. Where AOL HuffPost and NBC Universal own Black/Latino Voices and respectively, Yahoo could look to buying scrappy start-ups that cater to women of color such as Atlanta-based or Washington, DC-based

Similarly, since CEO Marissa Mayer explained her company’s new video strategy of producing fewer original series, perhaps Yahoo will consider partnering with smaller cable television networks, such as Magic Johnson’s Aspire TV. Instead of creating programming, Yahoo would license the rights to shows Aspire produces, such as Exhale, the African American version of “The View.” If that’s not doable, then maybe Yahoo can distribute programming by independent filmmakers like Stacey Muhammad‘s powerful web series, “For Colored Boys.”

Communities of color commanded enormous buying power in 2013, and they will continue to outpace the growth of the white market as minority populations surge, according to a report from the Selig Center for Economic Growth at the Terry College of Business at The University of Georgia.

The report shows that Hispanic consumers in the U.S. commanded a $1.2 trillion market in 2013, thanks to high birth rates, immigration and an increase in Hispanic entrepreneurship. In addition, African American consumers added $1 trillion to the 2013 market, Native Americans contributed $96 billion, and Asian consumers supplied $713 billion.

“As minority groups’ buying power continues to outpace the growth of the white market, these groups should see more tailored treatment from advertisers, producers and media outlets,” said Jeff Humphreys, author of the report and director of the Selig Center.

If Yahaoo’s Mayer plans to go shopping again, let’s hope she buys companies that will lift the companies advertising revenue and extend it’s reach. It’s the perfect time to try on a few products and services that are of interest to more diverse audiences, especially when you have money burning a hole in your pocket.