Yahoo is working on an app recommendation algorithm that will suggest new apps for you to buy based on apps you've purchased in the past.
Yahoo knows which apps its Yahoo Mail users have downloaded because whenever someone downloads an app from Apple's App Store or the Google Play store, Google and Apple emails that person a receipt.
Yahoo plans to scan the emails of its Yahoo Mail users to see what apps they are buying. Then, in the same way that Pandora recommends new songs based on the songs its users like to listen to most, Yahoo will recommend new apps for that Yahoo Mail user.
It's not yet totally clear how Yahoo will display those recommendations. Will Yahoo launch a new app-recommendation app? We don't know. Yahoo app Aviate has an app recommendation feature already. Perhaps the new algorithm will strengthen that feature.
We would ask Yahoo PR, but they have made clear it is company policy not to comment on reports like this.
One way Yahoo definitely wants to use the algorithm is to improve the targeting for the app install ads it delivers in all the various "streams" on its websites and in its apps.
Facebook and Twitter are making a lot of money selling app-install ads that show up in your News Feed or Twitter stream.
For a while now, Yahoo has been trying to get in on the action. It began experimenting with app install ads in the various streams in its various apps (News Digest, Yahoo! Finance, etc) last spring.
The new Yahoo algorithm is the product of a in-house "hack day" the company hosted for employees last May 15. Hack days are events where people get together, group into small teams, and try to "hack" together new products and services in just a few hours. Facebook made them famous.
Yahoo hack days end with a contest. On May 15, the hack that won was called "Which app am I going to buy next."
Yahoo has had some good luck with apps and technology first built at hack days. It's popular Yahoo Weather app came from one.
Privacy-concerned people may read this report and complain that Yahoo is scanning their email. Life is rough for those kinds of people these days. Google and Yahoo already scan email for the sake of serving better ads. Google recently turned in an email user for passing around child pornography.
App discovery is the biggest problem in the mobile world right now. There are millions of developers all trying to get their apps in front of people. Apple's App Store basically just lists new apps as they enter the App Store, which is an inefficient way to surface new apps.
If Yahoo's recommendation engine works, it could crack open a new market for Yahoo.
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