• by Laurie Sullivan  @lauriesullivan, February 19, 2015

Simon Khalaf, CEO at Yahoo's Flurry, predicts Internet companies will begin optimizing apps this year to become the "concierge" that will increase sales in applications. The move will "take over the entire commerce funnel from the beginning of the experience through the shopping cart."

Apple Pay and similar services on Android will remove the last piece of friction.

Mcommerce grew 78% to $118 billion, but 58% remains in the browsers because Internet retailers still rely on search engines like Google, Yahoo and Bing to send them traffic, Khalaf said. He made his comments at Yahoo's first Mobile Developers Conference Thursday, in front of an audience of about 1,000. More than half of online shopping now gets done on a mobile device, he said.

Yahoo took 1.8% of the $40.2 billion worldwide mobile advertising market in 2014, per eMarketer. Global mobile advertising is expected to rise 59.8% this year to $64.25 billion. By 2018, mobile ad spending will total $158.55 billion.

App content, mainstream industries coming to mobile, and phablets, which Khalaf labeled "killer devices," will continue to drive up ecommerce and mobile use.

Marissa Mayer, Yahoo CEO, said the average mobile user spends 177 minutes daily on smartphones in the United States, and 155 minutes in apps. Smartphone users spent 2.2 billion hours in apps last January built by Flurry developers, about 132 billion minutes spent in applications.

Yahoo held the conference to show the world how it built a serious focus on mobile advertising and services. When in doubt, look at the number of in-house employees working on building out mobile apps for Yahoo: 500 today vs. 50 in 2013. The group rebuilt the entire mobile offering from search to news, finance and sports.

Yahoo advertisers generated about 1.2 billion in mobile ad revenue in 2014, up from less than half in the prior year, Mayer said. Gemini was one of the biggest growth drivers. The combination of mobile search and native advertising helped grow revenue, with users searching four more times daily. Revenue per screen view rose by 65%.