Today Yahoo! announced its acquisition of mobile analytics and ad platform, Flurry. TechCrunch and Kara Swisher on re/code both reported the deal, with a $300M minimum price and $1 billion on the upper end. According to the press release, Flurry sees app activity from 1.4 billion devices monthly and 5.5 billion app sessions per day.
A little math: 1.4 billion devices does not equal one billion active users. However, a user could have one or many apps on his phone with the Flurry software embedded. Apps do not tend to have exclusive arrangements with one mobile analytics provider – let alone the free ones. They tend to have one or more. The code is small and there aren’t many compelling reasons to limit the number of buyers for your inventory unless there is unique value. It becomes hard to compare to the price tags of Viber ($900M) or WhatsApp ($17B to $19B). This is as much a play for audience as it is analytics. Flurry’s scale makes it interesting as an acquisition more so than what they do.
What does the acquisition mean?
No doubt, it’s a huge financial payoff for Flurry and its investors. When we interviewed Flurry a year or so ago for our research, they had 150 employees. 2014 will be known as a year of phenomenal mobile exit events – especially for those companies buying audience. It’s a good time to sell. A few thoughts:
1) Consumers may wake up one day concerned about their privacy and take back control. Consumers have downloaded tens and hundreds of millions of free apps without thinking through the consequences of what they are giving up in exchange for the free game or even retail or travel app. Some consumers may wake up one day and wonder why the flashlight app they downloaded keeps asking them to turn cellular data back on. My guess is – most won’t and the collection of data will persist.
2) The magic of mobile is the context it offers – location, time relative to events, steps walked, my emotions, etc. Context helps us anticipate the needs and motivations of consumers and better serve them in those moments. Mobile offers phenomenal potential to help us understand customers better, gain their trust, learn more about them and then better serve them. Doing so requires a combination of digital context (i.e., what we learn by observing them on their phones) and physical context – where they go, what they buy, etc. Mobile is about ingesting real time context and then serving customer’s in real time based on that holistic picture. This isn’t Flurry’s sweet spot. Nor is it Yahoo!’s. Yahoo! isn’t making a play that rounds out a current offering – this looks more like a strengthening of its existing model.
3) Flurry collects a lot of data – much of it they share back with its customers, but not all. The insight generated from the data could feed Yahoo!’s product development. While Amazon hasn’t given us a full reason of why they built its own phone, collecting data to better understand customers on the most prevalent digital device has to be part of the equation. This is similar.