There is a major Internet brand in Silicon Valley that has hundreds of millions of users, significantly improving mobile apps, a position that places it between the Big 4 of Apple, Google, Microsoft and Amazon, and it may not be out of the realm of possibility that it could come out with a smartphone or OS or both sometime in the not-too-distant future.

Facebook? Sure, most likely – maybe even a sure bet. But, as Yoda would say, there is another…

Yep, Yahoo!

A year ago, suggesting this post would have been laughed right out of The Next Web back-channel, right? Well, funny thing is, 14 months ago in Japan, someone (Softbank) actually released a Yahoo! phone, with full-on Yahoo! branding and quick access to the portal’s many services, including mail, calendar, etc. Of course that was in Japan where Yahoo! is the #1 site in the land and it was released by Softbank, which is a major shareholder in Yahoo! Japan. Oh, and it was just a custom skin built on Android 2.3, on a more or less run-of-the-mill Android phone. But still, it shows that the idea is not completely insane (right?).

It’s pretty clear that new CEO Marissa Mayer is (rightly so) aiming at mobile for the company’s resurgence, and the recent successful revamp of Yahoo!’s Mail and Flickr apps are encouraging signs that the company is on the right track. Obviously, revamping apps is a far cry from a phone or mobile OS - Mayer has said that Yahoo! doesn’t need an OS to compete – but let’s just say for a few minutes that that Yahoo! will ramp up its mobile strategy to enter the handset market and think about what it might take…

Like Facebook, it is extremely doubtful that Yahoo! would build the hardware of any Yahoo! phone. While Microsoft has gone that route with the Surface, and Google is most likely on the cusp of a homegrown phone, both companies have more resources than Yahoo!. However, there is no reason that Yahoo! couldn’t find a strong hardware partner to work with.

Potential carriers

On the carrier side, it’s a toss up at best on whether Yahoo! would have a partner in Softbank – the companies have had a bit of a rollercoster relationship over the years. Obviously, Softbank already floated the idea of a Yahoo! phone in 2011, but beyond that, Softbank is a company that is known to take risks, and if the Sprint deal is approved by regulators, it will have strong incentive to make a splash in the US – and whatever else it would be, a Yahoo! phone would certainly be a risky splash.

That said, Sprint has had a good relationship with Google (and Softbank is no stranger to Big G either) so how much of an inside track Yahoo! would have with the potentially new trans-Pacific carrier is unclear (also, does Mayer’s ex-Googler status help here?).

Operating systems

As far as an OS is concerned, it would be a major undertaking, but just as Google had very little OS experience before gobbling up a little-known startup to build Android, Yahoo! could acquire the necessary talent (if it hasn’t already) to build an OS from the ground up. It could also go the Amazon route and rejigger Android so much as to make it is own. Yahoo! also has many of the essential parts of an OS already and has a history of supplying APIs and working with developers, so building a developer platform for a mobile OS should be well within Yahoo!’s ability.

That said, unlike Facebook, which has a well developed app developer ecosystem that would translate well to a Facebook mobile OS, Yahoo! would have quite a way to go – even further than when Microsoft started going all tiles – in order to convince developers to build for its OS. In truth, this is probably the major stumbling block that would stand in the way of a Yahoo! phone/OS – it’s been awhile since a phone OS did well without great apps.

Even with Microsoft throwing a ton of cash around to get developers onto its platform, it took quite awhile to get to any kind of critical mass (and many would probably argue that in terms of quality and scope, Windows Phone / Windows 8  is still far behind Android and iOS). Yahoo! does not have anywhere near the kind of cash lying around as Microsoft did, so, coupled with potential (and probably well-founded) developer worries that a Yahoo! phone/OS might not catch on enough to warrant specific development for the platform, Yahoo! could have a hard time on that front.

Beyond the app ecosystem, Yahoo! would also have to convince smartphone users and carriers (including Softbank) that a) its OS has something to offer that existing OS’s don’t (Windows Phone had the new live-tile interface) and b) it is committed to its platform. In the end, the first part may be easier than the second – there is still plenty of room for innovation in the mobile OS space, as Windows Phone has shown, but being able to commit to that path (something you’d imagine Microsoft thinks about nearly everyday) is another matter and requires lots of patience, something Yahoo!’s board and shareholders have not exactly been famous for.

Facebook versus Yahoo!

Then there is Facebook. If Facebook were to beat Yahoo! to the punch and come out with its own phone first, it would be hard to see where Yahoo! could find a place in an even more crowded smartphone market. It would probably be much less damaging to Facebook if Yahoo! comes out with a phone first, unless it’s truly revolutionary. Truth be told, there could be something to be said about a Facebook + Yahoo! partnership on an phone or OS, as there are probably hundreds of millions of common users among the two services. The same most likely holds true for the Big 4 + either company as well, but the “soft power” of Facebook + Yahoo! could be a very interesting combination to Apple, Microsoft or Amazon to make their mobile efforts that much more appealing.

But let’s assume that Yahoo! were to go it alone – what new signs should we be keeping an eye out to flame the idea of a Yahoo! phone? Well, first would be a rebirth of a homegrown Yahoo! Maps, which is likely something Mayer will bring about regardless of whether a Yahoo! phone/OS is in the works or not. Second would be a revamped Messenger towards the iMessage mold. Also, any hires/acquisitions/acqui-hires that might show that Yahoo! is looking to build a mobile OS would of course be bellwethers.

The bottom line is this – all futures lead to mobile, and Yahoo! is one of the few companies that has enough users and starting pieces that if it sees fit, could make a push to develop its own phone or OS. Will it? Well, it would certainly be a huge gamble and one not to be taken lightly (again, commitment is key) but when you’re trying to turn around a company like Mayer is, eventually a huge gamble needs to be made – and if you’re going to gamble on something in tech right now, best it be on mobile.

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