Personalization Takes Center Stage At My Yahoo Redesign

by Trefis Team
Rate   |   votes   |   Share

Yahoo!’s (NASDAQ: YHOO) stock price has more than doubled since last year. While the market might attribute this rise to Yahoo’s investment in Alibaba, we believe the push for personalized content is a major contributor to the change in market perception about the company. Yahoo, a leading online content provider, has consistently lost market share in ads vertical to competitors such as Facebook (NASDAQ:FB), Google (NASDAQ:GOOG) and AOL (NYSE:AOL).

However, the recently redesigned home page has augured well for the company as it surpassed Google to reclaim the top spot in web traffic with over 196 million unique visitors in July. While this increase in traffic has yet to translate into revenue gains, we believe that redesigning of Yahoo properties is central to turning around the ailing company as this can substantially increase the unique user count by improving user experience.

Yahoo has now redesigned its customizable landing page, My Yahoo, to incorporate Marissa Mayer’s ‘user first’ strategy that focuses on developing user-centric customized products. This is the first redesign of the company’s landing page in over five years and is an attempt to make the user interface simpler and more personalized.

Click here to see our full analysis of Yahoo

Design Specifications

The new design is radically different from its older version. The plain blue background and text heavy white fore ground has given way to a customizable page with themes from bands, artists and nature. Moreover, My Yahoo brings together a collection of Yahoo properties such as Yahoo News, Yahoo Sports and Yahoo Mail. The page can be further personalized as a user can now pull in content from his favorite sites such as Forbes, the Wall Street Journal, etc. Additionally, a user can also choose a two-column, three-column or four-column layout when viewing My Yahoo from a desktop, with a more tailored but similar themed look when accessing from a mobile device.

The redesign aims to provide a unified user experience across devices. We believe that these changes have the potential to positively impact Yahoo!’s page views. We currently forecast that the monthly page views per unique visitor will decline to 155 by the end of our forecast period. However, if the user engagement improves and the figure reaches around 190, there can be approximately 5% upside to our price estimate.

Personalization Can Help Drive Ad Revenue

While My Yahoo, at 10 million, attracts far fewer users than Yahoo Home Page, these users tend to be most engaged, according to Dave Bottoms, the Yahoo executive responsible for both products. Yahoo plans to leverage this to show more targeted ads on the page. Since advertisers will be willing to pay more for targeted ads, this change can increase revenues for Yahoo. At present we forecast that RPM will stay relatively flat over our forecast period at around $1.40. However, if the redesign of the homepage increases revenue per page view to $1.80 by the end of our forecast period, we would see 5% upside to our price estimate.

Additionally, this redesign can potentially increase the unique user count for the landing page. The number of unique visitors is vital for Yahoo’s ad revenue as more people visiting the website generally translate into more pages viewed across Yahoo’s websites. Although it is still early to gauge whether this update will rope in new visitors, we are impressed with Yahoo’s redesign effort.

We currently have a $29 price estimate for Yahoo!, which is approximately 5% below the current market price.

Click Here To Understand What Drives A Stock At Trefis

Rate   |   votes   |   Share


Name (Required)
Email (Required, but never displayed)
Yahoo Logo
  • commented 4 years ago
  • Ever since I started using the Internet on a regular basis, about a dozen years ago or so, My Yahoo! and I have been good buddies. My Yahoo! is still the first thing that pops up on my PC screen when I sit down with my first coffee of the day. I'm a big fan of, perhaps sucker for, the personalization of one's computer experience; content, lay out, themes, colours, you name it and I want to be able to adjust it to my liking. Hence the attraction to My Yahoo! But I feel my old pal may be trying to pull a fast one on me.
    Yahoo Logo
  • commented 4 years ago
  • As a long time user of the My Yahoo feature, the new page is mostly sizzle and les steak. The things thy used to work so well are now a mess. Previously organized 4 column format degenerates to 2 columns randomly organized. Even the weather applet takes me to the wrong town even after repeatdly correcting it and turning on location services. So I think this customization will turn out to be a loser if they don't do a lot of work to fix it up and allow experienced use to go back to the old format. Right now you can't go back!