Yahoo Tests App Install Ads In Hopes of Jump Starting Mobile Business

Portal Reportedly Working on an App Discovery Service

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Yahoo hopes to jump-start its mobile ad business the same way Facebook did.

The Sunnyvale, Calif.-based portal has begun testing new mobile ads that people can click on to install an app on their smartphone or tablet. As with Facebook's mobile app install ads, Yahoo's version appear within its mobile properties' content feeds and cater to mobile app developers.

"We're testing in-stream ad opportunities with an initial group of advertisers who have mobile apps and want to connect directly with audiences across Yahoo mobile apps and sites. The purpose of these native ads is to help brands drive downloads of their mobile apps. These tests will begin to appear across all of our properties where in-stream ads run on [Apple's] iOS and [Google's] Android devices," emailed a Yahoo spokesperson.

Yahoo's new mobile app install ad
Yahoo's new mobile app install ad

Despite describing itself as a "mobile-first" company, Yahoo hardly has a mobile business. Half of Yahoo's monthly traffic comes on smartphones and tables, but mobile revenue "is not material," the company said in its year-end earnings report.

Meanwhile companies like Facebook have been able to migrate their advertisers to the smaller screens and leapfrog Yahoo's share of digital ad revenue. More than half of Facebook's $2.34 billion in fourth-quarter ad revenue stemmed from mobile. The social network's mobile cash cow originated with app developers.

Online gaming companies Kabam, GREE and Machine Zone are among the first advertisers using Yahoo's app install ads to drive downloads of their mobile games.

Months before Facebook rolled out its mobile app install ads in 2012, the social network opened up an app store. Yahoo may be reversing the strategy. Re/code reported last week that Yahoo is working on some kind of app discovery service. The mobile app install ads would appear to complement such a service.

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