Yahoo aims to become giant social network

 

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By Reuters

Posted on 8 Apr 2009 at 08:20

Like nearly 200 million other people around the world, Yahoo co-founder David Filo has a Facebook account.

But if Filo and new CEO Carol Bartz have their way, the kinds of social-networking features available on Facebook will become part of many Yahoo websites.

The company hopes the strategy will help link its disparate properties, bringing more advertising dollars and growth.

Yahoo is turning up the volume on many of its communications and community features and building bridges between the collection of Yahoo sites that have, at times, operated like virtual islands. "You start to introduce Yahoo users to other parts of Yahoo," says Filo.

Whether users warm to Yahoo's vision of the social internet with the same zeal they have for social stalwarts such as Facebook and MySpace remains to be seen. But if Yahoo's social-networking features catch on, advertisers will take note.

"People are spending time on Twitter and Facebook, but advertisers don't want to be there right now. That's the big issue," says JMP Securities analyst Sameet Sinha. "But Yahoo advertisers are already there."

While Yahoo has scores of online properties ranging from fantasy sports services to celebrity gossip and financial sites, more than half of Yahoo users only use a handful of Yahoo's sites, the company says.

In the next several months Yahoo will begin rolling out new versions of its most popular products, from Yahoo Mail to the Yahoo home page. A thread of social-media features, including a common user profile, list of friends and regular updates about friends, will tie the family of Yahoo properties together.

When an individual recommends a news story from the Yahoo homepage, uploads a photograph on Flickr or makes a trade on a fantasy baseball team from Yahoo sports, Yahoo will send an alert to a network of friends or contacts.

Yahoo is developing technology to broadcast roughly 100 types of such posts and actions.

Many of Yahoo's properties rank among the most popular on the internet. The company's homepage had 329 million unique visitors in February, according to research company comScore; Yahoo Mail had 282 million unique visitors in February, second to Microsoft Hotmail.

And with Yahoo a distant no. 2 to Google in internet search and its revenue growth stalled, infusing its online content assets with social elements could provide a new path to growth.

Online content is more compelling with social media elements, says Allen Weiner, an analyst at industry research firm Gartner. Such content is better suited for advertising than traditional social-networking sites, he says, where communications between users are the main event.

Search or social?

Yahoo has a lot of balls in the air - and hungry rivals. Its efforts come as social networking is increasingly getting noticed by established internet and media companies. Last week, media reports whipped up speculation that Google was in talks to acquire microblogging service Twitter, though neither company has confirmed the reports.

While Yahoo's plan to become more social pre-dates Bartz' arrival in January, people at the company say she has fast-tracked the initiative. "She really instilled a sense of urgency that this is critical to our success going forward," claims Neal Sample, Yahoo's vice president of social platforms.

The scope of products to be included in the project has been broadened by Bartz, and Sample's team has been given extra resources as Bartz has closed underperforming Yahoo properties.