Yahoo has relaunched its web portal, supported by a $100m global advertising campaign.

The company hopes the website refresh will boost both traffic and revenues.

Yahoo will also open its home page to rivals, allowing users to integrate third-party web services like Facebook or Hotmail into its portal.

Yahoo has been struggling to turn its position as the world’s most popular website into profits. The portal is the first move of new boss Carol Bartz.

From openness to profit

When Yahoo first announced its relaunch plans, many analysts derided the idea, arguing that most web users now ignore portals and use search engines to go directly to the page they want.

However, the vast majority of Yahoo’s customers still go to the portal first, insists Yahoo’s senior vice-president for Europe, Rich Riley. That also makes it the most attractive place for Yahoo to sell advertisements.

“Frontpage adverts are incredibly powerful,” said Mr Riley, and can cost millions of dollar for a single day of global advertising.

At the same time, Yahoo believes that a new openness to rival brands will actually increase its profits.

The new “customisable applications” allow users to see a snapshot of their favourite websites and services within the Yahoo portal – whether it is a social networking site, a rival web mail service, or their favourite website.

This is supposed to make the Yahoo portal “stickier” and the centre of web users’ internet experience.

Fittingly, the advertising campaign has the catch phrase “It’s Y!ou”, featuring the exclamation mark that is part of the Yahoo brand.

“The [new] home page is a powerful way to get a view into your life on the internet,” said Mr Riley, quoting surveys that suggest that 60% of Yahoo users in the UK want a one-stop shop to organise their life on the internet.

In the United States and the United Kingdom, a majority of users have already been testing the new website, but from 23 September the new look will be the default worldwide.

“We expect more traffic, the number of unique users to go up… an increase in audience engagement and more repeat visits,” which in turn will drive advertising income, said Mr Riley.

Partnerships

The new portal, however, also has an unprecedented number of links to non-Yahoo websites, potentially taking traffic away from Yahoo’s sprawling network of news, weather, finance, email, messaging, and picture services and more.

In the UK, for example, the Yahoo website features top headlines from the Telegraph, Guardian and Daily Mail newspapers.

Since the beta version of the Yahoo website was launched in the UK, Yahoo has become the second-largest source of online traffic to the newspaper’s website, said Mr Riley.

Yahoo is getting a share of the advertising revenue generated by this traffic to partners.

Ten focus markets

The $100m advertising campaign accompanying the relaunch is global, but will focus on 10 key markets: United States, United Kingdom, India, France, Brazil, South Korea, Taiwan, Indonesia, Hong Kong and Canada.

The strong emphasis on emerging markets reflects Yahoo’s belief that it is “where the next billion people are coming online”, according to Mr Riley.

The portal’s relaunch is accompanied by an overhaul of the user interface of Yahoo’s search engine, which does not yet profit from Microsoft’s new search engine Bing.

The results page of Yahoo’s search engine will show not just the usual list of search results and sponsored links, but also a left-hand navigation that helps users to narrow down their search further.

In July, Microsoft and Yahoo agreed a deal that will see Yahoo’s websites use both Microsoft’s search technology and search advertising.

Yahoo in turn will become the sales team for banner advertising for both companies. However, the deal still awaits regulatory approval and is not expected to be finalised before spring 2010.

Unlike rival and erstwhile suitor Google, Yahoo has been struggling to turn its dominant position on the web into comparable profits.

During the three months to June, Yahoo made a mere $141m profit on revenues of $1.57bn.

The change of direction is driven by new chief executive Carol Bartz, who replaced co-founder Jerry Yang in January this year.

Source: BBC

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Speculation continues to spread within Search Marketing circles as to whether or not Yahoo and Microsoft are planning to work together in some capacity. Even following the collapse of Microsoft’s efforts to acquire Yahoo for a massive $44 billion over a year ago rumours have reignited about the two companies working together following the recent launch of microsoft’s latest Search/Decision Engine Bing. This has been further fuelled by comments made from executives from both companies.

It is now thought the pair are looking to combine to create a more effective rival to search engine giants Google. Bing is said to be set to become the search provider on Yahoo.com allowing the two companies to compete for further market share and inventory.

A recent report from AdAge suggests that a deal is likely to be announced this week and could potentially give Microsoft up to a 30% share of the international search market. According to the report the deal would be structured as below:

“Yahoo would be allowed to sell search ads on Bing.com as well as its own site, giving it more search inventory to sell and making it a bigger player in the search sales front. It would also immediately be able to save millions by not having to maintain its own search infrastructure. The latest terms of the deal underscore Microsoft’s devotion to developing and owning technology vs. selling media.”

Basically, the idea behind this would be to cut Yahoo’s costs whilst opening a much larger revenue stream. In addition, the deal would allow Microsoft the opportunity to become a bigger player in the search market.

However, this deal is far from secured and until both parties can happily agree on way to effectively work together in may take time for this arrangement to be hugely positive for the businesses. Remember, both Yahoo and Microsoft have desperately struggled to organically improve market share by any meaningful percentages over the past few years and a deal between the two is unlikely to change this insantly.

Microsoft still have to ensure that Bing is a much much better product than Google for any significant changes yet.

Source: Mashable

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