The number of people visiting Yahoo’s three most important products—Yahoo Mail, the Yahoo.com home page and Yahoo Search—on a daily basis declined meaningfully over the past year, according to confidential internal data. It’s a reminder of the deep challenges any potential buyer of Yahoo would face.
Daily active users going to Yahoo’s home page fell 16.5% between the first week of December 2014 and the same period in 2015, the data show, while those going to Yahoo Mail dropped by 11.5%. The same metric for Yahoo Search fell 8.8%. In each case, time spent by users dropped by an even greater proportion, suggesting Yahoo is losing some of its more-engaged users.
In contrast, Tumblr has been doing relatively well, while Yahoo Sports is a mixed bag, according to the data. (Data on Yahoo Finance, which has held steady, can be found here.)
Confidential Yahoo data show a troubling trajectory for some of its most important Web properties. Yahoo Mail, Yahoo’s home page and Yahoo Search, which are tightly connected to one another, are shedding a substantial number of users.
Among the takeaways from the data: Yahoo’s transition from PCs to mobile is far from complete, and it’s a painful one. The company has made little headway in attracting younger people to its services. The data cast doubt over CEO Marissa Mayer’s projection that Yahoo will get back to revenue growth in 2017 and beyond. A spokeswoman did not have comment.
The data reflect activity during the first week of December 2015 for desktop and mobile devices as well as the amount of time being spent by those users on those properties, and how those metrics compared to the same period a year earlier. One caveat about the numbers: They were put together by different product teams at the company, and each team may have used a different methodology.
Here’s the full breakdown and context:
Total DAUs: 56.9 million, down 11.5%.
Mobile DAUs: 24.4 million (43% of the total), down 2.9%.
Total minutes per day: 1.2 billion, or 20.8 minutes per user per day, down 31.6%.
Historically, Yahoo Mail has provided the biggest single source of display ad space across Yahoo, and it is a critical feeder of traffic to the Yahoo.com home page, Yahoo News and Yahoo Search. (Display ads make up 45% of Yahoo’s revenue.) But Google’s Gmail, which recently passed one billion monthly active users, has taken share from Yahoo. That implies Gmail’s daily active users would be at least 500 million, dwarfing Yahoo Mail.
Even more concerning, the time people spent on Yahoo Mail is declining precipitously, by more than 30% last year. This figure reflects the decline in the number of daily active users, although the fact the rate of decline is so much higher indicates that those defecting were heavier than typical users of Yahoo Mail.
The silver lining is that its mobile DAUs aren’t falling fast, though it was performing better in the middle part of last year. That suggests a marked degradation in usage as the end of the year approached.
Yahoo.com Home Page
Total DAUs: 52.6 million, down 16.5%.
Mobile DAUs: 11.3 million (21.6% of the total), down 0.8%.
Total minutes per day: 471.3 million, or 9 minutes per user, down 28.5%.
These figures are a big deal for Yahoo. The home page is a big feeder of traffic to Yahoo’s array of content sites, from News to digital magazines like Yahoo Parenting, though some of those have grown traffic through article-sharing on Facebook.
Yahoo.com obviously hasn’t transitioned well to mobile. About 22% of Yahoo home page daily users are on mobile, compared to 90% for Facebook. For Yahoo, that proportion is likely to grow but only because Yahoo.com is losing desktop visitors while mobile visits are flat.
The lower decline on mobile likely reflects Yahoo’s good fortune to have an icon on the home page of Apple’s Safari mobile Web browser on the iPhone in the U.S. When clicked, the icon takes people to Yahoo.com. (Right now, it also prompts people to download Yahoo Mail.) Losing that icon would spell disaster.
Total DAUs: 43.5 million, down 8.8%.
Mobile DAUs: 13.7 million (31.4% of the total), down 10.3%.
Total minutes per day: 606.4 million, 14 minutes per user, down 18.1%.
Yahoo Search is intertwined with Yahoo’s home page and Yahoo Mail. They can’t be easily separated from one another. Search gets a lot of usage from home page visitors and Mail visitors, and vice versa.
Yahoo’s transition from PCs to mobile is far from complete, and it’s painful one.
On mobile, Yahoo Mail and the home page were relatively stable, year over year, but Yahoo Search was not. The number of mobile daily active users dropped by more than 10%. Mobile users make up just over 30% of total Yahoo Search users, meaning Yahoo hasn’t found a way to move Search users to mobile.
These problems aren’t exactly surprising: Yahoo Search isn’t widely distributed on mobile. Google pays Apple a pretty penny to be the default search provider on the Safari Web browser on the iPhone and iPad. Moreover, Google’s Android operating system comes with Google Search built in; and Google Chrome, the Web browser that comes with all Android devices, is integrated with Google Search. Ms. Mayer has long tried to fix the distribution problems, to no avail. And Apple rejected Yahoo’s effort to replace Google.
The implications are extremely serious. Yahoo Search generates about 40% of Yahoo’s revenue, or $1.6 billion a year. That makes it the single biggest source of revenue.
Total DAUs: 26 million, up 13%.
Mobile DAUs: 17 million (66% of the total), up 30%.
Total minutes per day: 306.7 million, 11.8 minutes per user, down 20.3%.
Yahoo overpaid for Tumblr in 2013, but it is now one of the crown jewels in the company’s portfolio: It’s growing on both desktop and on mobile, and most of its user base is mobile. In that sense, Ms. Mayer’s promise not to “screw up” Tumblr has come true.
The Yahoo unit has had trouble making money from those users—in early 2014, Ms. Mayer made an overly optimistic projection that Tumblr would generate $100 million in revenue in 2015. As many predicted, that didn’t happen, and Yahoo recently took a $230 million write-down on the unit, which it acquired for $1.1 billion. But perhaps another company experienced in ad selling will have more luck.
That said, at 26 million daily users, Tumblr is a relatively small potato in the broader digital media world. Even Facebook’s Instagram has more than 200 million daily active users, according to one person who has seen such data.
Tumblr is one of the few Yahoo assets that could easily be split off.
Total DAUs: 5.1 million, up 2.9%.
Mobile DAUs: 4.5 million (87% of the total), up 8.2%.
Another asset that can be separated is Yahoo Weather, and it’s almost entirely a mobile property. But weather information is inherently hard to monetize. People don’t spend a lot of time with the app because it’s a simple utility. And Yahoo doesn’t own the weather data, so either it has to pay for it or split any ad revenue the app generates.
Total DAUs: 11.8 million, down 8.5%.
Mobile DAUs: 7.3 million (62% of the total), up 8.6%.
Total minutes per day: 114 million, or 9.7 minutes per user per day, down 10.6%.
Yahoo Sports and the separate Fantasy Sports site, which isn’t included in this data, could conceivably be sold separately from the rest of Yahoo, though Yahoo Sports still gets significant traffic from the Yahoo home page. Together, Yahoo Sports and Fantasy have more than 10 million daily active users on mobile. Traffic on the Fantasy site, however, is cyclical by nature because popular leagues like the NFL are only active for part of the year.