Yahoo (!) has recommendations for you, just for you

Yahoo! used to be the internet, and the internet was Yahoo! It was the search portal of choice, collecting the display advertising cash that trickled around Web 1.0.

This decade, however, the exclamation mark in its corporate name has seemed laden with as much pathos as it is possible to find in Sunnyvale, Silicon Valley. Its services have trundled along and its chief executives have come and gone ingloriously, while perkier competitors swiftly turned their company names into verbs.

Last month, when Yahoo – I’m going to drop the exclamation mark now – announced the addition of 200 jobs in its Dublin base, IDA Ireland chief executive Barry O’Leary reminded everyone that it had “successfully been running its operation here for nearly 10 years”. It is indeed easy to forget about Yahoo.

Yahoo's new(ish) chief executive Marissa Mayer is now attempting to reverse the decline in its relevancy. She effectively wants as many users as possible to "bleed purple", like co-founder Jerry Yang once said he would always do. It helps that under Mayer Yahoo is now back in black.

On Tuesday, however, after it released its first-quarter results, company-watchers reacted in the kind of unimpressed manner that suggests Mayer’s honeymoon period is coming to an end. Earnings were up, but revenues were down, as display advertising sales plunged.

Kinder analysts pointed out that Mayer’s expertise in search from her days as a Google engineer have already paid off in the shape of climbing search ad revenues. But in any case, it is too soon to assess whether or not Yahoo’s future is as bouncy as its punctuation. Mayer’s turnaround mission will need time before its success or failure can be properly assessed.

So what is the point of Yahoo? You can tell both nothing and everything from how a company describes itself in its “about” section. Yahoo’s begins like this: “Yahoo is focused on making the world’s daily habits inspiring and entertaining.”

Hmm. There’s a whole industry of toilet books that aspires to do something that sounds very similar. And while 17-year-old bedroom-entrepreneur Nick D’Aloisio calls Yahoo’s focus on making daily routines “meaningful” an “inspirational goal”, he would say that: Yahoo has just paid $30 million for his start-up, a news aggregator thingy called Summly.

And yet it is an elegant summary of how all media companies should approach their business model.

It’s not just talk, either. Mayer’s acquisitions to date correspond with the self-description. The start-ups she has picked up include Snip.it, which clipped news articles like a Pinterest for current affairs junkies; Alike, a mobile location discovery app that recommended nearby places to visit; and Stamped, another mobile recommendations app. They’re all defunct, as Yahoo’s “acqui-hiring” tactic is more about buying the talent behind the products, not the actual products.

Mayer has also made two other changes designed to re-align Yahoo with consumers’ existing daily habits. She has upgraded Flickr so that it boasts the share functions and retro-filters long-adored by Instagram users and she has integrated Yahoo Mail with Dropbox “to make attachments easier”.

But it is Yahoo’s fondness for personal recommendation technology that is at its heart. Mayer wants to construct an “interest graph” that gives Yahoo the ability to offer consumers content based on pretty much everything they have told the web about themselves, and everything their friends and peers have told it too.

Such technology is, ultimately, less about catering for consumers’ pre-existing tastes and preferences than it is about manipulating them in new directions – a process that used to happen “naturally” through a combination of self-discovery, “real world” interactions with friends and old-media gatekeepers.

The next part of Yahoo’s corporate statement goes like this: “Yahoo! keeps people connected to what matters most to them, across devices around the world. In turn, Yahoo! creates value for advertisers by connecting them with the audiences that build their businesses.”

Mayer sees it as a simple “chain reaction”– the more consumers engage with her products, the greater the advertising gold that follows. Sometimes it takes a techie speaking opaquely to remind us that this should be the mantra of all commercial media companies.

Of course, it remains to be seen whether Yahoo can connect a cat with a mouse without the headstart of a Facebook-style social network in its pocket. Intriguingly, Mayer has announced the next phase of her project: make “beautiful products”. It sounds radical, but it might just work.