SAN FRANCISCO – Yahoo’s purchase of Mountain View, Calif.-based Polyvore is in keeping with chief executive officer Marissa Mayer’s trend of acquiring companies and investing in fashion.
The terms of the deal, revealed late Friday, were not disclosed, but it’s clear that Yahoo is using the $9.4 billion it got from selling Alibaba stock to invest in both tech companies and the talent that comes with it. By acquiring Polyvore, a social shopping service whose users assemble shoppable collages, or “sets,” of fashion, beauty and home décor items, Yahoo also stands to gain a boost to its digital magazines — both by attracting Polyvore’s engaged audience and 350 advertisers.
Polyvore is a favorite among retail brands due to its high order value of $385 (higher than Facebook, Instagram, or Pinterest, according to a 2014 report from Monetate), and is often among the top three to five drivers of traffic to brands.
Yahoo re-launched its Style, Beauty and Makers digital magazines last year (among others), and hired fashion editor Joe Zee, cosmetics company founder Bobbi Brown and T.V. home redecoration host Katie Brown, respectively, to oversee the content.
But in addition to investing in content, Mayer, in her recent quarter earnings report, shared her thoughts that Web ads should delight and engage users as much as the content, and this is where Polyvore plays a role.
“Yahoo has done a fantastic job building magazines and verticles,” said Polyvore ceo Jess Lee on Friday. “Polyvore brings community and commerce.” Polyvore users create more than three million sets a month.
Yahoo senior vice president of publisher products Simon Khalaf, to whom Lee will now report, said it was too early to say exactly what Polyvore’s presence would look like on Yahoo. But he offered that, while Yahoo had been focused on creating a great experience around content, he was excited about Polyvore’s community and its ability to match brands and advertisers with shoppers. He said that the changes would come in pieces, starting with the Style, Beauty and home (referred to as Makers) sections.
Khalaf saw the acquisition of Polyvore as an opportunity to boost sponsored content – i.e., merging ads with editorial – using Yahoo’s native ad app, Gemini.
“The world of looking at content and not doing anything with it is gone,” Khalaf said. Going forward, he said, users will share, talk about and make purchases from content right away, especially on mobile. Yahoo reported an audience of 600 million on mobile, and Polyvore recently launched a Remix app, which allows users to shop more easily on a mobile device.
On Polyvore’s end, both Lee and Khalaf are eager to improve the product, and grow the site’s audience. Lee would not disclose how many users the site has. “Polyvore has an incredible CPC ad platform, and Yahoo has tremendous scale to expand its advertising offering,” Lee said.
According to Crunchbase, Polyvore hasn’t received investments since 2012, and has raised $22.1 million in total, and in 2014, it reportedly had more than 20 million monthly users. Lee declined to provide updated numbers.
In Yahoo’s second quarter earnings report, Mayer shared that Yahoo’s digital magazine users were at 65 million unique users, up 10 percent from the first quarter, and there was a 15 percent growth in display revenue on a GAAP basis. Gemini native ad revenue was $130 million. Ads sold were up 9 percent year over year and the price per ad was up 10 percent year over year.
Although Google still has a lead over Yahoo, it seems that Yahoo is increasingly differentiating itself as a content creator and using that to lead audiences to advertisers. And with this acquisition, Yahoo and Polyvore will continue to explore how that manifests.