Java installer ditches the Ask Toolbar, swaps in Yahoo defaults.
Attention Java users: Your long national nightmare of avoiding the Ask.com toolbar is over, replaced by the slightly less terrifying prospect of Yahoo defaults. SAN FRANCISCO — Microsoft isn’t the only huge software maker alarmed at what Google’s technology is doing to growth rates in the business-applications market.
At the company’s annual shareholder meeting on Wednesday, Chief Executive Marissa Mayer announced a partnership with Oracle aimed at getting more users to try Yahoo search.Yahoo Inc. is working with tax officials to complete the planned spin-off of its stake in Alibaba Group Holding Ltd. by the end of the fourth quarter, said Ron Bell, general counsel for the company. “We continue to work with them and be responsive to their questions and inquiries,” Bell said during a shareholders meeting in Santa Clara, where the company also announced it had struck a deal to promote its search and home page whenever people download Oracle Corp.’s Java, a set of software tools for writing and running programs across different devices and operating systems. Regarding Alibaba, Chief Executive Officer Marissa Mayer had reassured investors last week that the spin-off is proceeding as planned, helping to lift shares in the Web company. She was responding to a question at the Bloomberg Technology Conference about whether any potential regulatory changes would affect the tax-free plan to distribute shares in Alibaba to Yahoo shareholders. At the meeting, a product manager described new features in Yahoo Mail, including the ability to drag photos into e-mails, use themed stationery and view profiles of e-mail senders. “I don’t see the underline (button) anymore,” the person said during the Q&A period.
Instead, we recommend Firefox, Internet Explorer and Safari as longer-term options,” the notice on my PC read, after I tried to update my version of Java from within Chrome. Mayer has called Couric a “good investment.” Couric, who has been producing content at Yahoo for a year, has landed major “gets” including Stephen Collins, the popular 7th Heaven actor who admitted to sexually abusing underage girls 20 years ago, and the first post-trial interview with Reddit interim CEO Ellen Pao. The options to install these products are typically checked off by default, so users end up with unwanted software unless they carefully read through each step of the installation process.
It also points to a tech landscape getting fiercer as the software industry matures and revenue growth rates for some older platforms continue to slow. That enormous salary is not just a testament to Couric’s name power, but just as importantly, to how much Yahoo is willing to pay to look like a major player in media. Java software is installed on 89% of desktop computers in the U.S. and billions of devices around the world, from mobile phones to connected televisions, according to Oracle’s site. Of the two, Microsoft’s Office sales have been hurt more by Google’s free apps, because the search giant doesn’t yet have database software to challenge Oracle’s biggest franchise. Yet Google’s strategy of driving down the cost of accessing data via the Internet, along with a broader move to such cloud-based services from Amazon and Salesforce as well, has been a thorn in Oracle’s side.
The company currently has just 12.7% of the search market, below Google , with 64.2% and Microsoft , with 20.2%, according to the most recent figures from comScore. On Wednesday, Mayer’s team explained updates in these areas, showing its search platform provides more contextual information in a search (such as business hours, showtimes and photos) and partnerships among Tumblr’s best creators and marketing campaigns. And earlier this month, Microsoft categorized an older version of the Ask toolbar as malware as it tried to stop users from reverting their browser and search settings. (A newer version of the toolbar removes this search protection code.) Speaking to the Journal, a Yahoo spokesman tried to downplay the deceptive nature of these installations. “We have definitely made sure that our onboarding process is one that is highly transparent and gives users choice,” the spokesman said.
The pending lawsuit over whether Google should be able to use Java without paying copyright royalties helps explain the harsh marketing words over Chrome’s lack of support for the Java API. Yahoo wants to be young and hot and CEO Marissa Mayer and CMO Kathy Savitt have made numerous new hires, pivots and restructurings to get it that way. Google, still the dominant provider of search, now faces an opposing axis formed by Yahoo, Oracle, Microsoft (whose technology powers both its own Bing service and Yahoo search) and Mozilla, another web browser. But as Harvard University business professor Ben Edelman points out in the Journal’s piece, it’s still a deplorable tactic, potentially eroding trust in software updates even when they include vital security patches. (Java tends to be a major target for security exploits.) Getting involved in this business could prove lucrative for Yahoo, but at the same time lends the company a slimy patina that was once reserved for lesser rivals.
In the market for mobile operating software, meanwhile, Google’s Android faces off primarily against Apple’s iOS but also with Microsoft’s mobile version of Windows. Mayer said the Mozilla agreement is profitable for Yahoo. “We are in the middle of a multiyear transformation of our product suite and our businesses,” Mayer said. “We’ve made tremendous progress so far, and we’re investing in new growth.” Google, which used Java as a key building block of Android, has received support from industry groups worried the ruling could dampen software innovation. The fear is that after its huge, expensive makeover, Yahoo News, like its overall media operation, seems stuck with the same problem as before — a behemoth with so many irons in the fire that it is struggling to establish a core identity as its power diminishes. As the tech industry gets ever longer in the tooth – it’s now 30 years since the PC boom and 15 years from the dotcom era – look for competition among all these tech giants to get even hotter.
Marissa Mayer, CEO of Yahoo, attends the Cannes Lions 2014, 61st International Advertising Festival in Cannes, southern France, Tuesday, June 17, 2014. John Shinal has covered tech and financial markets for more than 15 years at Bloomberg, BusinessWeek,The San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others.
Yahoo’s strategy — pay big to play big — has been evident in other hires, including tech columnist David Pogue, who is rumored to make between $500,000 and $1 million a year; politics reporter Matt Bai from The New York Times and investigative journalist Michael Isikoff. It’s just asking to reconfigure a user’s Web browser settings. “It’s still a despicable tactic,” Edelman said. “If we make security updates into marketing opportunities, consumers will rightly and reasonably ignore or defer updates and then we’ll all be faced with less secure computers.” Yahoo declined to discuss terms of the partnership.
Its deal with Mozilla is now “profitable,” Mayer told shareholders, though she still hasn’t disclosed how much the company paid to become the default search engine for Firefox or what exactly she means by profitable. Under the revised terms of its search alliance with Microsoft, Yahoo is now free to show search results and ads on 49% of searches on desktops as well as all searches on smartphones and tablets. More from WSJ.D: And make sure to visit WSJ.D for all of our news, personal tech coverage, analysis and more, and add our XML feed to your favorite reader.
Adding to the worry is that Yahoo’s homepage — one of the most powerful drivers of reader traffic on the Internet — is up for a redesign, which may, initially at least, drive traffic even lower. While the big names earn huge salaries, Yahoo laid off 1,500 employees this year — a vast swath of lost careers that Mayer blithely referred to as “remixing and pivoting.” What Yahoo is chasing — indeed, what everyone is chasing — is the elusive millennial reader, a demographic so mythologized and misunderstood by marketers that it has earned the sarcastic moniker “Snake People.” This is, as any news executive could tell you, a fraught pursuit. The effort to court a new audience has rankled with some in the company, according to a former Yahoo staffer. “In media all-hand meetings, Kathy and Megan would talk about quality and transitioning from the audience we have to the audience we’d like to have,” the staff member said. “This confused many staffers — what’s not to like about the Yahoo audience?” Besides concerns about the age of the audience, Yahoo has to worry about how they perceive the purple brand. I think she’s picked people that don’t really appeal to a young demographic and a wide demographic,” he says. “Pogue and Couric are probably at the top of that list.” Yahoo’s struggles are similar to what many news organizations go through, but the difference is that, as a tech giant, it actually has options.
In addition to its news investments, Yahoo has been spending a lot of money on deals with companies like LiveNation for the rights to its concert schedule and on the rights to past seasons of “Saturday Night Live.” Yahoo is also the new home of former NBC cult hit “Community,” and won the rights to stream an NFL football game for free to the entire world. Adam Shlacther, chief investment officer at digital marketing firm DigitasLBI, said that these had already proven to be better investments than news, although it was still questionable if they would have a dramatic impact on Yahoo. “The focus there seems to be on tentpole events and big announcements or interviews.
Its hundreds of millions of visitors frequently visit its homepage to use basic services like mail and search, leading many to click on news stories while there. What could end up causing serious damage is if the same strategy that hasn’t made much of a dent for Yahoo’s news operation ends up having the same affect on the company’s broader efforts to rebrand the company as a premium media outlet. One investor pointedly asked why the company’s stock, which had been bolstered by holdings in Alibaba and Yahoo Japan has been in decline, is off almost 20% in 2015.