Yahoo playing catchup with Gmail

Last updated 10:35 12/12/2012
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Yahoo has retooled its free email service in an attempt to regain some of the ground it lost to Google's popular alternative.

Aside from the new look unveiled today, Yahoo introduced email apps for the iPhone, iPad and mobile devices running on the new Windows 8 operating system.

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

As she nears the end of her fifth month on the job, Yahoo CEO Marissa Mayer is trying to give people more reasons to use the company's online services and stick around longer.

"You've told us loud and clear that you want fewer distractions when it comes to email. You want to quickly login, communicate, and get on with your day," Mayer said in a post on Yahoo's official blog.

Yahoo is the No. 1 web email product in the United States and No. 3 worldwide, behind Gmail and Microsoft's Hotmail, according to comScore.

Mayer played a key role in building Gmail, which has emerged as the world's top email service in just eight years.

Vivek Sharma, General Manager of Yahoo Mail & Messenger, said the group of new mobile apps was part of Yahoo's goal of ensuring that its products are available across all major mobile platforms - a move that he said should help Yahoo's email stay popular with the younger generation of users.

"Most of the new users, especially young ones, are using mobile Internet devices. So the first order of things is to make sure there are native experiences for them," said Sharma referring to mobile apps that are specially designed for smartphones.

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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.

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"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.

Yahoo's stock has risen 25 per cent since Mayer became CEO in July, reaching its highest level since September 2008 when Yahoo co-founder Jerry Yang was CEO.

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.

-AP/Reuters

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