Will This New Design Help Yahoo Compete With Google for Precious Ad Dollars?

In her first major product launch since becoming the Chief Executive Officer of Yahoo (NASDAQ:YHOO), Marissa Mayer is seeking to reverse three consecutive annual sales declines by launching a redesigned version of the company’s email service that will be more appealing to mobile users. As Bloomberg reported on Tuesday, the new service has the potential to compete with Google’s (NASDAQ:GOOG) Gmail, which has added millions of users as Yahoo Mail’s growth has dropped off.

What Does the Yahoo Mail Upgrade Entail?

“We’ve redesigned the new version of Yahoo! Mail with speed in mind — getting through your emails is faster than ever before,” said Mayer in a press release announcing the service redesign. “And, because mobile is everything these days, Yahoo! Mail now has a consistent look and feel across devices.”

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Mayer hinted that plans for a Yahoo Mail redesign were underway during the company’s third quarter conference call, noting that Yahoo had to grow itself into a mobile company in order to stay relevant. As she told analysts on the call, Internet communication is “prime to be reimagined.”

Data released by the research firm comScore confirmed Mayer’s analysis; Yahoo Mail is prime to be reimagined because Gmail’s gains in email accounts could soon make Google the number one email service provider in the United States. According to the most recent figures, Yahoo holds the top spot with 77,744 unique visitors in November, down from 92,015 in 2011. Comparatively, Google had 75,008 visitors last month, which was an increase from 60,099 last November.

CHEAT SHEET Analysis: Can a New-Product Pipeline Help?

One of the core components of our CHEAT SHEET Investing Framework requires that companies consistently produce successful products or services. While the technology publication ZDNet said that the email market is typically more concerned with keeping customers than attracting new ones, Google’s Gmail has been continuously attracting new clients, and Yahoo has been forced to redesign its email service just to keep them. Email customers are very important to companies like Yahoo because of the associated advertising revenue. “Ad-laden email clients are about as close to personal delivery as you can get,” said ZDNet.

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