Yahoo Strengthens Mobile Strategy with OnTheAir Acquisition
In a strategic move to enhance its mobile offerings, Yahoo has acquired video chat startup OnTheAir for an undisclosed sum. The deal, announced in December 2012, brings OnTheAir’s entire five-member team to Yahoo’s mobile division under Adam Cahan’s leadership.
Why This Acquisition Matters
- Competitive Edge: The acquisition positions Yahoo to better compete with Google Hangouts in the video communication space
- Talent Acquisition: Yahoo gains a team of Stanford-educated engineers and former employees of Facebook, Apple, and Meebo
- Rapid Market Entry: Instead of building from scratch, Yahoo accelerates its video chat capabilities through this strategic purchase
The OnTheAir Technology
Founded just nine months prior to acquisition, OnTheAir developed innovative video chat technology that enabled:
- Live streaming of single or split-screen interviews
- Ad-hoc webinar creation for large audiences
- Unique “video call-in” functionality resembling internet radio shows
The Impressive Founding Team
All five co-founders joined Yahoo as part of the deal:
- Erik Goldman - Stanford CS Masters, former Facebook intern, Apple iCloud employee
- Josh Schwarzapel - Founding team member at Cooliris
- Abel Allison - Former Meebo interaction designer
- Dan Hopkins - Gmail interaction engineer
- Mike Kerzhner - Apple OS X engineer
Funding and Market Context
Prior to acquisition, OnTheAir had raised:
- $880,000 seed round led by Scott Banister and True Ventures
- Additional investment from notable angels including Howard Lindzon and Ben Narasin
- Advisory from lean startup expert Eric Ries
The competitive video chat landscape, dominated by players like Google and the struggling Airtime, made this strategic acquisition particularly timely for both parties.
Yahoo’s Growing Acquisition Strategy
This purchase followed Yahoo’s October 2012 acquisition of Stamped, signaling:
- A more aggressive M&A approach to compete with Google and Facebook
- Focused investment in mobile communication technologies
- Willingness to acquire both talent and technology through strategic purchases
The Team’s Farewell Message
In a heartfelt note on their homepage, the OnTheAir team expressed:
“We are excited to be joining Yahoo!… 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.”
The acquisition represented a significant step in Yahoo’s efforts to revitalize its mobile strategy and compete in the rapidly evolving video communication market.
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