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Yahoo Acquires Video Chat Company OnTheAir as Mayer Sets Sights on Google

Sites include . Published on December 5th, 2012. Written by Anthony West.

Marissa Mayer has taken on the challenge of rebuilding Yahoo and saving it from near-certain death and so far, she isn’t doing a bad job. Unlike her predecessors who did a lot of talking and very little by way of execution, Mayer has rekindled the culture of “getting things done” inside Yahoo and for the first time in a long while, Yahoo is looking vibrant again.

The latest move by Mayer (at least we can assume this was influenced by her leadership) is the acquisition of a video chat startup called OnTheAir. Much like Google hangouts, the startup lets users do video conferencing either as single or split-screen layouts and is just 9 months old. The acquisition sum is undisclosed but given the age of OnTheAir; it doesn’t appear Yahoo had to cough up too much cash. The five-member team of OnTheAir are reportedly all staying put and will help Yahoo to integrate the app into its mainframe.

The team released a statement confirming the acquisition and by the excitement is palpable. We are excited to share some big news: “OnTheAir has been acquired by Yahoo! When we started OnTheAir, we had dreams of building a company that made a difference in the daily lives of millions. Our pursuit was challenging: We put in late nights together. We debated intensely. We worked like crazy to build a product we were proud to put our name on,” said the release.

Solid pay-off for early backers

The 9 month old startup had only managed to raise $880,000 in seed funding but this was obviously enough for the founders to build something worthy of the attention of companies like Yahoo. Given that the price tag on OnTheAir wouldn’t have been too high, Yahoo perhaps felt that it needed to make a play sooner rather than later.

The big question now is how Yahoo will make OnTheAir deliver something credible as an alternative. The media and search company doesn’t have a social networking presence like Google or Facebook so merging OnTheAir with something social and embedded is not the easiest option. Things are even more complicated now that Yahoo Messenger is now being stripped down to its bare bones.

Presently OnTheAir offers a webinar-like capability and users can broadcast meetings to a wider audience. This isn’t present in Google Hangouts and even in Skype one does not have that much of a capability. In this sense OnTheAir represents a good platform upon which Yahoo can build.

We can’t forget too that the deal was as much about acquiring OnTheAir as it was about acquiring the talent behind it. With this fresh addition to the talent pool, Yahoo is poised to develop exciting apps for the growing social and video space.

The coming months will be very interesting for Yahoo and Mayer. The bold new moves she’s made hasn’t translated itself fully into share price gains and we probably won’t know how things are affecting the bottom line until the first quarter of 2013. Nonetheless, the moves are positive and appear sound; Mayer may just be doing the trick.

Given that Google recently pushed away the support of many loyal clients, there are several opportunities for Yahoo and Facebook to grab more market share.

Do you think Marissa Mayer has done a good job at Yahoo so far? Let us know in the comments below.

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