Yahoo Buys OnTheAir To Compete Better With Google

By Alexandra Burlacu | Dec 05, 2012 09:33 AM EST

Yahoo has just snapped up San Francisco-based startup OnTheAir, marking its second acquisition since Marissa Mayer took over as CEO back in July.

OnTheAir is a small startup comprising of just five employees, but it may help bolster Yahoo's relevance in an increasingly competitive market. The new acquisition puts Yahoo in a better position to compete with Google+ Hangouts and other similar services.

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"When we first met with the team at Yahoo, it was clear that everybody there is committed to making mobile products the backbone for the world's daily habits," OnTheAir wrote on its Web site, announcing the new deal.

Mayer has been struggling to change the fortunes of the ailing Yahoo, and believes the rapidly growing mobile market space is integral to the company's future growth.

"Our top priority is a focused, coherent mobile strategy," Mayer explained during a quarterly earnings conference call, noting that half of the company's technical staff will one day be working on mobile.

The five-person startup called OnTheAir launched back in March, allowing users to host video conversations in a "television talk show" setting. In this scenario, a host can call members of a group "on stage," where they can be watched by anyone with a video stream. In other words, it's a sort of Google+ Hangouts experience with a talk show format.

Neither Yahoo nor OnTheAir revealed the financial terms of the acquisition, and it remains unclear at this point whether Yahoo would discontinue the service. Back in October, when Yahoo acquired recommendations engine Stamped, the deal seemed to be aimed more at recruiting engineering talent than technology, as the company discontinued the service after the acquisition.  

The move to purchase Stamped was widely referred to as an "acqu-hire," and the OnTheAir acquisition seems to be geared towards the same endeavors, i.e. adding more engineering talent. The startup's small team includes one former Google employee, as well as former employees of Apple and instant messaging service Meebo.

The second acquisition of a mobile startup may suggest that Yahoo has a wider plan to poach talent capable of developing branded mobile products, in a bid to better compete with rivals and attract more consumers in the long run.

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