• by Mark Walsh  @markfwal, September 7, 2011

Yahoo's lack of an aggressive mobile strategy may not have doomed Carol Bartz, but the burgeoning mobile sector is another key arena where the Web portal has been overtaken by rivals like Google and Facebook. The contrast is especially sharp with Google, which has made no secret of its ambitions for dominating the mobile space as computing and the Internet increasingly shift to handheld devices.

That starts with search, where Google has extended its desktop hegemony from the desktop to mobile phones. One estimate from researcher Royal Pingdom last year put Google's search volume share at almost 100%, well above its already commanding 65% share on the PC. Driving Google's mobile search growth has been Android, its mobile operating system that has seen explosive growth over the last two years.

With Android as the foundation of its mobile strategy, Google in 2009 acquired mobile ad network AdMob to accelerate its display advertising on phones. More recently, it pushed into the emerging mobile payments market with its Google Wallet initiative. That's not to mention its $12.5 billion acquisition of Motorola last month to add the hardware piece to its growing mobile arsenal.

Earlier this year, Google said revenue from its mobile operations had hit a $1 billion run rate, and company chairman Eric Schmidt has talked of Android becoming a $10 billion market in its own right as it spreads to more and more devices.

Facebook has not charged as hard into the mobile arena as Google, but is poised to dominate social networking on handsets with more than 250 million mobile users to date worldwide. The company has also said its mobile users are more active than those on the desktop. Last month, Facebook unveiled its Messenger app, highlighting efforts to extend its mobile presence, while its Project Spartan will reportedly create a mobile platform for the iPhone to compete with iOS.

Apple continues to rule digital media on devices with its iTunes-iPhone ecosystem; it has made its own foray into mobile advertising with iAd. In comparison, mobile seems more like an afterthought for Yahoo, after being an early leader in the space with Yahoo Go for Mobile and by forging search and content partnerships with scores of wireless carriers globally.

With the shift away from operator "walled gardens" and inroads made by Android and Apple's iOS, however, Yahoo has fallen behind. The lack of its own operating system to ensure mobile real estate for its Web properties has obviously put Yahoo at a disadvantage. It's too late for Yahoo to jump into the smartphone OS race, say analysts. "[Yahoo] took its eyes off of mobile to try and focus on solving their search problems," said Tim Bajarin, president of tech consulting firm Creative Strategies. "In the meantime, mobile exploded and they have not had the emphasis on this as an advertising platform in the same way Google and Apple have."

Lately, Yahoo has focused on introducing personalized versions of its offerings for mobile in the same way it has tried to make its home page customizable. Earlier this year, the company unveiled its app-like Livestand digital news reader for tablets, and on Yahoo's second quarter conference call, Bartz talked about ongoing efforts to roll out new "more interesting apps" from each of major properties such as news, sports and finance.

Still, Bartz and the company seemed more focused on video -- its fastest-growing ad segment -- as a key area of development for Yahoo. Whether that will change under a new CEO is unclear. But with mobile Internet usage forecast to outstrip that on the PC, tech experts argue Yahoo will have to make a bigger play to reach consumers on connected devices.

"The window of opportunity for Yahoo to be a mobile leader may have already closed. But there could still be time, with more focus and resources, for Yahoo to be competitive again on mobile devices," said Greg Sterling, senior analyst at Opus Research. He suggested, for instance, that Yahoo might acquire a mobile display ad network to bolster its mobile ad capabilities.

As Yahoo undertakes a strategic review of its business and begins a search for a new CEO, Bajarin said that mobile, as a large and fast-growing market, "needs to be a key part of their turnaround strategy." A Gartner forecast earlier this year projected mobile advertising alone worldwide will more than double this year, to $3.3 billion -- and grow to $20.6 billion by 2015.