Dive Brief:
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Yahoo Friday said it will buy social fashion startup Polyvore for an undisclosed amount.
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The acquisition is part of the company’s new “Mavens” strategy, which, CEO Marissa Mayer said earlier this year, “is core to our growth because it counteracts declines in our legacy business.”
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Yahoo, which is struggling behind Google and Facebook when it comes to digital advertising, nevertheless has a load of cash to spend after Alibaba’s IPO.
Dive Insight:
Yahoo was obligated to sell some of its interest — 140 million shares — in Alibaba at IPO time last September, which made Yahoo $9.5 billion before taxes. That may be Yahoo’s best hope these days, in that the company could buy its way out of the doldrums it finds itself in.
This acquisition of Polyvore is part of that strategy, and it looks to be a savvy one, considering that marketplaces appear to be among the strongest areas in online retail these days.
But wherever there’s stiff competition, there will soon be winners and losers. While marketplaces offer their hosts somewhat nimble retailer operations — no need for inventory or much of a supply chain — they also depend on the practices and performances of their participating retailers.
Last quarter Yahoo reported the consequences of its uphill climb — it’s having to spend more and lay off workers to cut costs elsewhere. But the company is also coming out with nimble video messaging app that Wired magazine called “weird but cool.” It doesn’t get much better than that when it comes to assessments of new tech in this digital age.