Yahoo in 2013: 28 acquisitions, $1 billion spent on product development

As it takes head on giants like Google, Yahoo invested roughly $1 billion in 2013 on product development to beef up its media, news and entertainment offerings with the aim to serve advertisers and consumers better.

The California-headquartered company also went on an acquisition spree, acquiring as many as 28 startups last year, as it looks to grab consumers' attention, especially those using mobile handheld devices.

CEO Marissa Mayer, who joined the firm in 2012 to revive its declining fortunes, has been working on "re-imagining" Yahoo's core businesses across search, communications, media and video.

"Product development expenses for 2011, 2012, and 2013 totalled approximately $919 million, $886 million and $1 billion, respectively, which included stock-based compensation expense of $81 million, $74 million and $83 million, respectively," the firm said in a US SEC filing.

Yahoo said it continually launches, improves and scales products and features to meet evolving user, advertiser and publisher needs. Most of the software products and features are developed internally by the employees, it added.

(Also see: Yahoo partnering with Yelp to improve local search results: Report)

"Our engineering and production teams are primarily located in our Sunnyvale, California, headquarters, Bangalore, India and Beijing, China," the firm said in the filing.

Yahoo, which has seen a major chunk of its user base going mobile, aims to make compelling ads and integrate them with news and information.

Reiterating its strategy of "building products focusing on mobile first", the firm further said: "Today we have over 400 million monthly mobile users, an increase of more than 150 million users since we launched our new Mobile and Emerging Products team in October 2012".

Today, mobile traffic represents more than half of its 800 million monthly users (the numbers do not include Internet Message Access Protocol or Tumblr users), it added.

Yahoo said increasing mobile traffic has been the result of an "engaging and inspiring suite of new and revamped product experiences designed to make users' daily habits mobile.