Yahoo just bought Rockmelt, a social browser and mashup website, for a reported $60 to $70 million.
It’s the latest in a rapid series of acquisitions by Yahoo CEO Marissa Mayer, but one that’s particularly noteworthy because it greatly expands Yahoo’s beachhead in social networking. In so doing, it will help Yahoo better monitor its users, grow its database of demographics and preferences, and ultimately make more money selling ads.
When Mayer became CEO little more than a year ago, Yahoo didn’t have a major social network of its own, unless you count photo-sharing site Flickr, a sort of proto-social-media site whose community dates to 2004. Mayer went on to buy various social recommendation engines and the niche network Snip.it, but only with the $1.1 billion May acquisition of Tumblr -- a social net built around microblogging -- did Yahoo become a serious social player.
The Rockmelt deal is much smaller than the Tumblr acquisition in dollar terms. Rockmelt’s high-powered investors appear to be barely recouping what they put into the company. But the acquisition provides Yahoo with a mashup system that can put the company between users and their Facebook and Twitter content, plus news streams from around the open web. It also provides Yahoo with the opportunity to intercept users as they are creating and sharing new content and potentially nudge them toward Yahoo-owned networks.
Yahoo isn’t giving details on how it might use Rockmelt. In a brief blog post, two Yahoo VPs said only that Rockmelt technology will further the goal of “help[ing] people discover the best personalized content from around the web.” This frames the Rockmelt deal in historically resonant terms: In its earliest days, Yahoo kept users around by sending them away, providing clean, fast-loading pages stuffed with great outbound links. RockMelt helps Yahoo update the “send them away to bring them back model” for the social age, showing people the best of outside communities in order to build loyalty.
But just as, in 1990s, Yahoo starting creating its own content and converting its links from outbound to inbound, so too will Mayer’s Yahoo inevitably seek to convert outbound social traffic to properties it owns. Rockmelt is part of an overarching Mayer strategy to capture more of everyone’s attention and activity, becoming in the process a sort of neo-portal that can feed a massive tracking database and better compete with Google and Facebook in the cutthroat online ad business. The more things change at Yahoo, the more they stay the same.
