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Yahoo email revamped in Marissa Mayer's first big product move


Updated: December 12, 2012, 5:52 AM IST
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Yahoo email revamped in Marissa Mayer's first big product move
Yahoo is spiffing up and expanding its email service in an attempt to regain some of the ground lost to Gmail.

San Francisco: Yahoo is spiffing up and expanding its email service in an attempt to regain some of the ground lost to a Google alternative that lured away millions of users.

The changes unveiled on Tuesday are meant to make Yahoo's email faster and easier to use on the Web. To cater to the growing audience checking their email on smartphones and tablet computers, Yahoo also introduced mobile apps for the iPhone, iPad and devices powered by Microsoft's recently released Windows 8 system.

The company, which is based in Sunnyvale, California, also updated its email app designed for Google's Android operating system.

The email overhaul is part of Yahoo CEO Marissa Mayer's crusade to give people more reasons to visit the company's online services and stick around longer. In doing so, Mayer hopes to sell more advertising and accelerate Yahoo's revenue growth after years of financial malaise. The stagnation has kept the company's stock price below $20 for more than four years. Yahoo shares were hovering near $30 before the company squandered an opportunity to sell itself to Microsoft for $33 per share in May 2008.

Yahoo's stock rose 9 cents to close at $19.52 on Tuesday. The stock has surged 25 per cent since Yahoo hired Mayer from Google nearly five months ago.

During her 13 years as a top Google executive, Mayer played a key role in building the company's Gmail. The service was a novelty when it began in 2004 and with Mayer's help it transformed into a trend-setting service that surpassed the early leads of rival offerings from Yahoo and Microsoft.

The years between Yang and Mayer were tumultuous ones at Yahoo, as the Web pioneer cycled through four different chief executives and a variety of strategies.

Yahoo ranks among the world's most popular websites, with roughly 700 million monthly visitors. But revenue has eroded due to competition from Google and Facebook and changes in the online advertising market that have compressed prices for the online display ads that are key to Yahoo's business.

Many analysts and tech-industry observers say Yahoo's online products have failed to keep up with rivals when it comes to integrating innovative mobile and social media features.

Through October, Gmail had more than 295 million active users to eclipse Microsoft's Hotmail at nearly 284 million users and Yahoo email at 282 million, according to the most recent data from the research firm comScore. At the same time last year, Hotmail led the pack with 335 million users, followed by Yahoo at 303 million and Gmail at more than 245 million.

With more people gravitating to Gmail, Microsoft also recently redesigned Hotmail and rebranded the service as Outlook.com - a reference to the communications channel built into the software maker's widely used Office suite of programs.

In a sign Google isn't taking its lead for granted, the company is the in process of phasing in changes to Gmail that will give it a slightly different look and add more features.

The new PC version of Yahoo Mail features fewer ads, primarily by doing away with pass-through Web pages that users previously encountered before they could access their inbox and which appeared after a user sent an email.

Eliminating those pages, and improvements to the way Yahoo displays its email Web pages, means that users can now reach their inboxes 40 percent faster, Sharma told Reuters in an interview on Tuesday.

Yahoo's email product is an important piece of Yahoo's overall online business, serving as a conduit to bring in users which Yahoo then tries to redirect to its other websites, such as news articles, stock quotes and videos.

By simplifying the product's look, Yahoo could increase the amount of time that users spend visiting its online properties, said RBC Capital Markets analyst Andre Sequin.

"A website can be incredibly useful, but if a user interface is annoying or has too many flashing ads, it can drive a person away," said Sequin.

He compared Yahoo's email revamp to one of the key accomplishments that Mayer is credited with at Google: the sparse homepage, which is free of ads and prominently features a search engine box surrounded by white space.

"Improve the experience on mail and there's a good chance you can get people to stay engaged with Yahoo properties for a long time," said Sequin.

All the retooling underscores the ongoing importance of traditional email, even as people increasingly rely on text messages sent on phones and thoughts shared on Facebook and Twitter. Despite its shrinking market share, Yahoo says it still processes about 30 billion emails each day and estimates its users collectively check their inboxes about 190 million times per day.

Although none of the major email providers charge to set up an account on the Web, the services are valuable because they encourage repeat visits and require people to log in. Internet companies covet activities occurring under a logged-in identity because they can more easily track people's preferences and tailor ads more likely to appeal to users' tastes.

With inputs from Reuters and AP)

First Published: December 12, 2012, 5:52 AM IST
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