Yahoo Continues Battle for Internet Traffic by Revamping Its Site

By Linda Orlando

The recent overhaul to Yahoo’s home page is the first redesign of the site since September 2004. Yahoo decided to make the upgrade in an effort to boost its competition with rival sites including MSN, AOL, and Google. The company is also battling an increasing competition from social networking sites such as MySpace.com.

Yahoo’s chief operating officer, Dan Rosensweig, said the changes are a matter of course for any company wanting to remain on top. "Our goal is to have the best page on the Internet," Rosensweig said. "We feel like this does something great for everybody." The changes are the most dramatic since the debut of the site in 1994, when it was developed by two Stanford University students, Jerry Yang and David Filo. Yahoo rivals MSN and AOL, the two runner-ups to Yahoo’s most-visited crown, have also revamped their looks during the past year.

Yahoo’s new design includes more interactive features that make it easier to review weather forecasts, check e-mail, read movie reviews, and listen to music by pulling down menus, without having to click through other pages. A new addition called "Yahoo Pulse" offers opinions and recommendations from Yahoo’s 402 million users worldwide. The new look is long overdue, according to analysts, because the site’s appearance was old-fashioned compared to other sites. The new redesign, code-named "Spirit" is more modern, and was selected after months of testing with selected users. The new look won’t show up as the default Yahoo.com page for several more months while it undergoes final tweaking.

Remaining the most visited website on the Internet is important to Yahoo because the advertisers on the site provide most of the company’s profits—and keeping the site busy is critical to advertisers choosing to contract with Yahoo. The company’s earnings haven’t been growing as rapidly as Google’s, a fact that has affected Yahoo’s stock price, which has dropped 21% compared to a drop of 9% in Google’s stock price. But the company has to do a balancing act between keeping the site current to attract new visitors, and avoiding dramatic changes that may alienate longtime users who are familiar and comfortable with Yahoo the way it is.

Some analysts believe that the rapid grown of the social Internet site MySpace may be a sign that Internet usage is changing from purely informational to social activity. "The bar keeps getting raised," said Mike McGuire, an analyst for Gartner Inc. "I think you are going to see constant tweaking because of sites like MySpace."