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Yahoo! Joins the Redesign Bandwagon in Efforts to Stay Relevant in the Web 2.0 Era


by Caroline Dangson, IDC

On September 17, Yahoo! announced the start of limited user testing of its redesigned home page that will combine features of Yahoo! and My Yahoo! to give users a more personalized and relevant portal experience. One percent of Yahoo! users in the U.S., UK, France and India will get to test the new proposed design. Yahoo! Front Doors is about keeping the 300 million users worldwide that visit its home page a little longer, and of course about attracting more users to make it their springboard to the Internet. The idea is that increasing user engagement on Yahoo!'s home page will lead to higher CPMs, more sales, and therefore higher advertising revenue. This would help fund Yahoo! services and eventually to achieve better profitability.

The ever growing long tail of content on the Web today makes it all the more difficult and time-consuming for consumers to navigate and efficiently use the Web. Many consumers have multiple personal accounts – email, IM, social networking, ecommerce, etc. There is a need to aggregate these online accounts for quick and easy online management. Yahoo! Open Doors will eventually allow for this. With an open platform, users will be able to add their non-Yahoo accounts to their personal Yahoo! account dashboard that will preview activity on each of these accounts all on the home page. This will allow users to quickly asses which accounts have updates requiring their attention and be able to prioritize the management of these updates in today's time-starved world. Of course, the user has to have an active Yahoo! account and be signed into the home page in order to benefit from this service.

There is great potential for Yahoo! with this strategy if it acts quickly in rolling out the many stages of Yahoo! Front Doors. For the past few months, Yahoo! has been telling us what they plan to do. Now is the time to do it. Others are not standing still. IDC believes the most interesting story here is how all Web 1.0 era portals (AOL, MSN with Windows Live, and now Yahoo!) are revamping into Web 2.0 properties to remain relevant with consumers and continue to generate advertising revenue to better compete with Google. AOL has already beaten Yahoo! to the punch by allowing users to sign in for a preview of multiple email accounts including Gmail, Hotmail and Yahoo! mail from its home page. AOL is also already providing a downloadable toolbar that can incorporate many other non-AOL applications including from competitors such as Yahoo! and Google. Windows Live has revamped it's home page as well, recently adopting a Google-look with the focus on the search bar. Surprisingly, Google still remains in test mode several weeks after announcing user tests of a more personalized iGoogle page. There has been no mention of Google bringing these features to its home page except that Google is promoting iGoogle on its home page today.

Yahoo! Open Doors has some interesting features that might help it in its fight for traffic. Unlike iGoogle, the proposed Yahoo! design incorporates space for content that the user may not know exists. This move is aimed at how consumers want and need help with search and discovery of new and popular content on the Web. Hence, users will not feel restricted by a template of content they have predetermined. Instead, Yahoo!'s new design will provide a mix of what the individual user is interested in personally while also highlighting what other Yahoo! users consider the best of the Web (assisted by Yahoo! Buzz). The theory is that consumers want the Web to be relevant and personalized, but also want help sorting through the long tail of services they do not already know exist. The new design that Yahoo! is testing is a hybrid of Yahoo! and My Yahoo! based on the idea that users want both views in one place. Given the fact that My Yahoo! has a fraction of the worldwide traffic that Yahoo.com enjoys, the strategy to bring elements of MyYahoo! to the home page makes a lot of sense.

The most interesting part of Front Doors is Yahoo!'s invitation to the developer community to write new applications that users will be able to access from the new "My Apps" dashboard on the Yahoo! home page, and possibly other Yahoo! pages as well in the future. Developers got their first taste at Yahoo!'s recent Open Hack 2008 event last Friday. Yahoo! has not made an official statement when it will enable developers and publishers to build applications for its home page other than that it will happen "in the coming months." We have to caution that the strategy of announcing plans without concrete timelines for their delivery will diminish industry and consumer confidence in Yahoo!. This is something Yahoo! cannot afford right now. While Yahoo! must balance the risks of alienating users who are sensitive to layout and user interface changes (as we see in the case of Facebook's new design), the initial design changes Yahoo! is proposing are not so drastic in IDC's opinion that they will require extensive tests and feedback before roll out. Yahoo! has already lost too much time dealing with threats from Microsoft, Carl Icahn and shareholders. Now that the waters have calmed, Yahoo! should focus on execution. By opening up to outside applications, Yahoo! now joins Google and AOL in leveraging the developer community and reviving what otherwise could become a stale Web site for users. Applications also provide interesting new channels for advertising, of which Yahoo! certainly hopes take advantage.



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