Barely a pebble off Yahoo!’s cash mountain?
Yahoo recently announced it has acquired a small UK company called Whereonearth to help improve its local search and mobile phone services and compete more effectively with search leader Google.
Terms of the deal were not disclosed. Privately-held Whereonearth, which has about 25 employees, has had a limited licensing deal with Yahoo since 2000.
Whereonearth specializes in location-based internet services, including a sophisticated database of geographical locations that will let users search for local goods and services without entering a zip code or post code.
Whereonearth’s technology is already used by Yahoo!, as well as Hutchison 3G, lastminute.com Royal and Sun Alliance and Recruitsoft. The ten year-old London-based company is currently owned by Elderstreet Capital Partners, M J Technologies, and Reuters Venture Capital.
The acquisition comes as companies including Google, Yahoo and Amazon.com’s A9 vie for dominance in localized internet searches, which are seen as a way to draw in more users and classified advertising revenue.
Geolocation services are also expected to play a major role in mobile phone searches, delivering results that are close to the user. Whereonearth’s database covers more than 90 percent of Europe, Asia and the Americas, Yahoo said, including detailed information about where certain areas are in relation to each other.
Having that geographic data asset is something that is becoming critical for us to make the user experience relevant, as well as the advertiser experience more useful, said Bassel Ojjeh, Yahoo’s vice president for strategic data solutions.
Yahoo! said Whereonearth’s technology would soon find its way into its search marketing, search, local/maps, mobile and personals offerings.
The companies did not discuss how much Yahoo paid. It’s fair to assume the price-tag will barely dent Yahoo’s cash balance, which according to published results, currently stands at $2bn, up from a comparatively skimpy $650m a year ago.
Revenues for the third quarter ending September 30 were up 47 per cent on the year to $1.3bn. This led to operating income of $270m, up 57 per cent while net income was $254m, virtually unchanged on the previous year.
If nothing else, the deal means Yahoo! redresses one of its biggest current failings: the lack of a major product line with Earth in the title. Since the launch of Google Earth and MSN Virtual Earth Yahoo had been embarrassingly terra free.