3 steps Yahoo! has to take to shine again

Ever since she replaced Jerry Yang as CEO of Yahoo! in December 2008, Carol Bartz has always said that she wants to focus on the main product offered by the company. This includes Yahoo.com, Yahoo! Mail and Yahoo! Messenger. This strategy is really smart and it allows her to close unpopular services like the Briefcase or Geocities and save money for what’s really important. In addition she introduced a $1 million worldwide promotional campaign. Now here is my take on what should be done to make the portal really shine again.

Yahoo! Mail
After testing a brand new Yahoo! Mail for 4 to 5 months the Yahoo! team has unveiled a more social Yahoo! Mail with social features and the introduction of applications for everyone. More precisely Yahoo! has unveiled this beefed up webmail in August in the USA and again for the launch of their promotional campaign Yahoo! It’sY!ou. Now how can Yahoo! really turn their email service back ahead of the competition ? When I interviewed the Yahoo! Mail Europe they sort of remained skeptical about introducing the IMAP protocol in order to compete with Gmail, AOL and soon Hotmail. They said that less and less people use a mail client nowadays and that implementing the technology was not an easy task considering the number of users.

Quite frankly the more I think about it, the less I’m actually supporting the introduction of the IMAP protocol. In fact, thanks to Gmail IMAP has become taken for granted and its introduction would not be seen as a killer feature anymore. Yahoo! should go above that. I personally believe they should show their leadership and license the Microsoft Exchange / ActiveSync technology. They’d be offering a seamless synchronization for mail, contacts, calendar, notes and tasks and, in this sense, offer a very nice alternative to Apple’s MobileMe service. I’m not asking for this technology for free, but this could be a nice addition to the Yahoo! Mail Plus subscription. This would certainly be a move that would finally answer the premium users’ need waiting to see an upgrade for 5 years. In fact Yahoo! could as well rename that subscription for it surely could be added to their mobile offering. Of course licensing Microsoft Exchange / ActiveSync might however be a problem since it is a competitive to the Zimbra Collaboration Suite technology which Yahoo! has owned since September 2007. Therefore I’m not sure if the two may be implemented together in the same product.

This in my opinion, would really show that 1) Yahoo! is focused on the user, 2) Yahoo! really wants to make the most of their most used services.

Yahoo! Messenger
Yahoo! Messenger is another leading product of the Sunnyvale company. I have in mind a strategy that would take advantage of the competitors’ success. Right now Yahoo! has twice as many subscribers as Gmail. This may seem to be a lot but Google’s webmail product actually grows very, very fast and is a major threat to Yahoo! Because, the number of Gmail users grows quickly, I would not be surprised if more and more people actually use the Gtalk integrated client.

That’s why Yahoo! Messenger needs to open up and more specifically to the Jabber protocol. However, Yahoo! should specifically promote the interoperability with GTalk. This way Yahoo! Messenger would work with Windows Live and GTalk (meaning all Jabber-based messengers). This, in my opinion, would be a clever way to take advantage of Gmail’s growing popularity while attracting more geeky users and promoting their leadership to everyone. Just imagine : “Now in Yahoo! Messenger you can talk with people who use Gtalk and Gmail”

Yahoo! may not target the geeky people but those are precisely the ones that are going to recommend the client. Think about the geek who’s gonna explain his mom that with Yahoo she’s gonna be able to talk with him on Gtalk and the rest of the family on Yahoo! and MSN…

My Yahoo!
The new Yahoo.com homepage introduces many more personalization features. Users are able to set up their personal feeds and view them right from the portal homepage. This in my opinion is very good because web users are getting more and more familiar with web technologies and, as a result, are expecting better customization tools from the services they use on a daily basis.

This move however kind of kills the very purpose of My Yahoo! Sure the service give you much more options like the ability to adjust the layout of the page. Yet in terms of content, 95% of the modules you can add are actually simple feeds. There are not many applications. Also paradoxically you may find much more advanced services like Netvibes ; the latter is actually pretty cool and offer more applications.

I believe Yahoo! should radically change the meaning of My Yahoo! and show that they can still place themselves as a leader. I’m not seeing a Netvibes competitor but much more: a Web OS. Yes, I believe My Yahoo! could actually be transformed into a webbased OS. All it would really take is new a interface and more applications. This would radically place Yahoo! as a leader by democratizing the technology like they did with RSS. The average Jo would be delighted to have his web apps centered in one place. This of course would mean that Yahoo! sign several agreements with various web 2.0 company so that they provide their API just like they do for Yahoo! Mail.

Going forward, a web OS or a Web Desktop could introduce new ways to make money. Think about a partnership with an online storage provider for example… Again the whole idea may sound very geeky but we all know that we’ll eventually see those online desktops used on a regular basis and it will certainly become a common service in the next 5 years. Sure it won’t replace the offline desktop but the online storage services are already replacing USB keys. Things are moving in this direction. So why not lead the way ? Also wouldn’t it be nice to have something to show in front of Chrome OS … ?

Again it is only my personal opinion but should Yahoo! hesitate to take those three steps they would simply fade away and become the new forgotten AOL. At some point one should make big decision to move forward. These three steps mentioned above simply cannot be ignored anymore.