Yahoo! Inc. (YHOO - Free Report) CEO Marissa Mayer recently unveiled the new look of the website. The redesigned website will comprise a navigation bar for Yahoo shortcuts at the top of the page with the search tab moving to the left-hand side margin.
The right side of the redesigned home page will feature a stack of capsules, which Yahoo calls “utilities”, dedicated to finance, sports, weather, video clips, Flickr for photo sharing and friends’ birthdays. Each of these can be customized or scrapped as per user preference. The left side of the page will display Yahoo services. Yahoo is also working on the structure of the website to considerably reduce loading time. The redesign is aimed at giving the site a cleaner and fresher look.
Yahoo’s market position has deteriorated in the last few years as it lost its position in search and even its leadership in display advertising to Facebook (FB - Free Report) and Google . Engagement on its properties has also been on a decline. The design change is aimed at making the site more attractive so that users spend more time on the page.
According to a report by comScore, Google sites in the U.S. alone have 66.5% market share followed by Microsoft (MSFT - Free Report) , which has 17.3%. As of Apr 2013, Yahoo had 12% market share. Thus, Yahoo has a long way to go to reclaim its lost market share.
Currently, Yahoo has a huge task at hand, which is to bring back its users and make them spend more time on its properties. If successful, Yahoo may reclaim some of its lost market share going forward. This would be crucial in bringing back advertisers as well.
In the first quarter of fiscal 2013, Yahoo generated revenues of $1.14 billion, which were down 15.3% sequentially and 6.6% year over year. Traffic acquisition cost (TAC) was down 42.3% sequentially and 49.9% year over year. Excluding these costs in all periods, net revenue was down 12.5% on a sequential basis and 0.8% from last year, short of the consensus estimate.
Yahoo has a Zacks Rank #2 (Buy).