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.




  1. says

    Tracie, this is good information. I would analyze it a bit differently, however. Instead of the consumer spending angle, I would use valuation. The reason is because companies make acquisition decisions based upon market share competition and the value of a prospective company for acquisition on the open market. For example, if Yahoo were to consider purchasing any of the startup companies mentioned in your piece, they would conduct due diligence to determine the worth of those companies on the open market as well as whether or not the acquisition would catapult their competitive advantage and position in acquiring a greater share of the market in comparison to their competitors.

    The reality is no one has done the work necessary to determine the valuation of these African American-owned media enterprises. But given their focus on capturing such a tiny slice of a tiny market (African Americans are a very small slice of the media market pie), the likelihood that Yahoo! would be interested in buying a media startup focused solely on the African American market is very low, if such a consideration is being given at all. And if Yahoo! did seek to acquire a media org targeting black Americans, it most likely would look at those reaching the largest share of the black audiences, such as Radio One’s network of media companies.

    At the end of the day, anyone with a media platform targeting a tiny segment of the market must make the case to a prospective buyer of the company that such acquisition will bolster that company’s position in the competition for market share. Plus, they have to make the case for the worth of their own company on the open market, thus justifying why they can demand the asking price, whatever it may be.

    My guess is that all black-owned media combined has a valuation that is so low that Yahoo! could purchase the entire landscape, lock, stock and barrel, if it chose to do . Unfortunately, I just don’t think it’s worth it to prospective corporate buyers. When BET and Essence were cherrypicked, they both set a precedent that guides decisionmaking processes for those seeking to purchase black-owned media properties. That activity is quiet, if there’s any to speak of at all.

    So, when it comes to marketing budgets of brands targeting African American audiences and prospective buyers of media properties, those two analyses are separate in my opinion. Both deserve attention, which you’re giving. But I think they have to be thought of in separate channels of data and analysis.

    • Tracie says


      I understand valuations and agree with your point. Where we may differ is your belief that there is no one doing the work to determine the value of African American startups. Not only are there people who can do this, there are companies willing to do this work given the proper motivation: Consulting fees.

      I agree that purchases of Essence and BET set the standard, but your analysis fails to address the purchase of Black Voices by AOL and its eventual integration into HuffPost, the creation of Latino Voices, NBC Universal’s launch of and even NPR’s launch of CodeSwitch. I believe these big brands recognize that there are profitable audiences in these markets, and they are serving them through these verticals. There is also the notion of narrow-casting that cable networks know all too well. If Yahoo decided to narrow-cast to African American women, it certainly wouldn’t be the first to do so; Centric Television is re-branding itself as the TV network for African American women; Yahoo is a bigger brand and could also do it. Whether Yahoo would do it well is another question. If Bravo can market itself to very narrow segmented markets through reality shows like Duck Dynasty and its Housewife franchises, why can’t Yahoo do it? I believe Yahoo is in the perfect position to experiment in this way with African American and/or Latino women – two significant markets with growing financial clout — with its verticals in search, ad services and web series programming.

      Yahoo could probably buy all black-owned media and still have billions left over. That’s my point. Why not spend a few million to diversify its holdings, do what AOL HuffPost is doing, but do it better. With the right purchases and the right management, it could happen. My last point about the “right management,” however, is imperative.

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