8 Jan 2008
After losing some of its luster on the personal computer, embattled Internet icon Yahoo Inc. is hoping to outshine Google and other rivals on the mobile phone.
In a move announced Monday, Yahoo opened its mobile platform so outside programmers can develop new applications for Yahoo pages accessed on mobile handsets. Yahoo hopes the mini-applications, known as "widgets," will help attract more on-the-go users, which will bring the company more money from advertising.
The Sunnyvale-based company also unveiled a redesigned home page for mobile phones that includes more content and enables visitors to designate material they want highlighted.
And it released an upgrade to its "Go" software that is supposed to facilitate Web surfing on mobile phones and enable Yahoo to show ads with graphics.
Jerry Yang, a Yahoo co-founder who took over as chief executive nearly seven months ago as part of the company's turnaround efforts, discussed the changes Monday during an address at the International Consumer Electronics Show.
"We're committed to creating the best and richest mobile experience for all consumers," Yang said.
Yahoo believes its Go software, introduced at the same Las Vegas convention two years ago, gave the company an early advantage in a high-stakes battle to deliver more advertising and Internet services to the 3 billion mobile phone subscribers around the world.
But Yahoo is a step behind rival Google Inc. in the push to persuade programmers to develop applications for its mobile platform.
Mountain View-based Google began wooing outside programmers two months ago when it announced a long-anticipated mobile software package called "Android" that is expected to hit the market during the second half of this year.
Yahoo is betting more programmers will be interested in working on its mobile platform because it has the potential to reach billions of phones, said Yahoo spokesman Cory Pforzheimer. Google's Android software is expected to be installed on a few million phones initially.
Besides touting a better mobile platform, Yang also said Yahoo is planning to add more bells and whistles to its free e-mail service later this year.
In a preview at CES, Yang showed how the e-mail might allow users to highlight incoming mail sent by their closest friends and plant widgets in their mailboxes.
Yahoo emerged as an Internet powerhouse shortly after Yang and fellow Stanford University graduate student David Filo started the company in 1995. But Yahoo has been eclipsed in recent years by Google, which got a major lift in its early years when Yahoo hired the startup to provide its search results.
Other trendy online hangouts like Facebook and News Corp.'s MySpace also are hurting Yahoo.
But Google represents Yahoo's biggest headache. Once far smaller, Google has emerged as the most influential force in the rapidly growing Internet ad market while Yahoo's growth has faltered in recent years. It now takes Google about two months to make as much money as Yahoo does in an entire year.
Yang has promised to shake things up, but the results so far haven't impressed investors. Since Yang became CEO, Yahoo's stock price has dropped by 18 percent while Google shares have surged by more than 20 percent. That has left Google with a market value of $203 billion compared with $31 billion for Yahoo, whose shares added two cents Monday to close at $23.18.
Unless Yahoo can snap out of its funk later this year, some analysts suspect management will face mounting pressure to sell the company. Potential buyers include Microsoft Corp. and eBay Inc.
Establishing itself as a leader in the mobile advertising market could help Yahoo bounce back. U.S. spending on mobile ads is expected to triple from a projected $1.6 billion this year to $4.8 billion in 2011, according to the research firm eMarketer Inc.
