Yahoo's Mark Daiss, co-founder of artificial intelligence service Aviate Yahoo
When Marissa Mayer stepped on stage during the Consumer Electronics Show in Las Vegas in January to deliver her first keynote at the high-profile gadget extravaganza, she made sure it was a star-studded affair. There was a faux newscast by Saturday Night Live's Weekend Update team, poking fun at the "CEO of Yoo-hoo," a trio of songs crooned by musician John Legend, and a parade led by Yahoo's biggest talent grabs, news anchor Katie Couric and former New York Times reviewer David Pogue.
But amid the hoopla -- and before she delivered a slew of announcements during her hour-long talk -- Mayer gave the first headline to a little-known artificial intelligence startup. "We're incredibly excited to kick things off today by announcing that we have acquired Aviate," Mayer said.
Aviate's technology takes advantage of Android's open platform to take over your smartphone's home screen and showcase information and apps when they might be the most useful to you. If you check Yahoo's Finance app every morning, for example, Aviate takes note and rearranges your home screen to put that app -- and similar apps -- front and center. Like Google's artificial intelligence service Google Now, Aviate takes cues from personal information and data, as well as your location or the time of day, to surface information and highlight apps at the moment they're relevant.
"Think about how much your phone understands you," Mayer told the crowd at CES. "Imagine what happens when that context becomes part of the search experience."
While Yahoo, a lumbering early Internet pioneer, is in the midst of an attempted turnaround under Mayer, it is still an almost $5 billion-a-year company in annual sales with a lot of resources. Investing in the platform can only add to the net positive for consumers interested in artificial intelligence, as other tech giants like Apple, Google and even Twitter do the same.
Yahoo CEO Marissa Mayer at CES Screenshot by Richard Nieva/CNET
But Yahoo arguably needs this kind of technology more than those other companies. The race to dominate platforms, from smartphones to smart glasses, is in full swing and Yahoo is behind. While some companies are already on the lookout for the next big platform -- Facebook recently paid $2 billion for the virtual reality goggle maker Oculus -- Yahoo has had difficulty making a dent on the current platforms of choice, smartphones and tablets. That's a problem given that Yahoo's core business, display advertising, is in decline as its hold on consumers seems to be slipping. In February, Yahoo fell to No. 2 behind Google as the most-trafficked desktop Web site in the U.S. for the first time in seven months.
Since Mayer joined Yahoo as CEO in 2012, the company has overhauled many of its mobile properties, from its weather to email apps. But it still doesn't have a pervasive mobile experience, leaving Mayer on an earnings call with investors in January to describe Yahoo's mobile advertising revenue as "not material." By contrast, Facebook, which has also had woes transitioning from desktop to mobile, now makes 53 percent of its advertising revenue on mobile.
That pervasiveness is key. Then, Yahoo will have a mechanism to push its own content to users, including its Finance, Sports and Shopping properties. "If Marissa wants to tie all these apps into one cohesive experience, Aviate becomes critical," said Sameet Sinha, a senior analyst at research firm B. Riley and Co. (which owns a tiny holding in Yahoo).
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Marissa Mayer wants Yahoo to be big in mobile. Meet Aviate
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