Yahoo, Inc. Increases E-commerce Business with Acquisition of Polyvore

Yahoo has announced the acquisition of Polyvore, a site that lets users search for clothing items and creates themed collections.

Yahoo has announced the acquisition of Polyvore, a site that lets users search for clothing items and creates themed collections.

Yahoo! Inc. has attained fashion commerce start-up Polyvore in order to improve its advertising portfolio.  The recent acquisition has deep links to the web portal company, as it was initiated by 3 ex-employees of Yahoo in 2007. Keeping that in mind, deal’s financial terms has not been disclosed, but supposed to be around $25 million in cash and almost $35 million in stocks.

Now an eight years old company, Polyvore connects merchants with customers looking for tips on beauty, clothing, and decoration products. This recent service has made progress in its major operations in a very short period of time, which made the service being named as “fashionista’s playground” by Good Housekeeping Magazine. After acquisition, Polyvore will still work as an independent service; however Jess Lee, Chief Executive Officer of Polyvore will be incorporated into Yahoo.

Marissa Mayer, CEO of Yahoo Inc. is the one who led the base for the acquisition, proclaiming the significance of advertising as the biggest part in the step to acquire Polyvore. The social commerce website currently has around 350 retailers (also advertisers), all of which will be included by Yahoo’s advertising space namely, Yahoo Gemini. The company’s native model will be adapted by Yahoo, as the ads should be similar to the main content of the website and do not look like conventional ads.

Yahoo has been finding it difficult to revamp its advertising and mobile businesses, in spite of dozens of contracts in the past 3 years in order to improve advertising revenues. Marissa Mayer planned majority of deals, which were according to her retail background, but was not able to shift company’s earnings. Last week, Yahoo released its financial estimate that accounted for small growth, after deducting ad commissions for the next quarter.

Yahoo Inc. is valued at approximately $4 billion after its Alibaba Group Holding Ltd. stake spinoff. The search engine giant has accrued almost 1/3 of its Maven’s business overall revenue. The latter contains native, video, social, mobile advertising, so it makes a lot of sense for Yahoo to target such division to increase future growth.

Previously the company’s purchase contract, Polyvore has been autonomously profitable for almost 4 years in a row, regularly becoming the top largest generator of online social commerce traffic; which makes it possible to generate more sales than Pinterest and Twitter combined.

Yahoo! Inc. stock was up 0.05% to $36.69 at market close on Monday August 3.