Now that Yahoo’s search deal is done, the company can finally focus on making itself a better Yahoo.
The first step: Build a better homepage.
Yes, Yahoo (YHOO) launched a re-design of its homepage late last month in order to have some good news during an otherwise dismal Q2 earnings call.
But — and we don’t aim to hurt anybody’s feelings here — the “new” homepage didn’t strike us as very new at all.
It struck us as boring, as lipstick on a pig — as a short-sighted answer to the mission new-ish CEO Carol Bartz has given Yahoo: to be at the centre of Internet users’ lives.
Now, we know we at SAI live a very different Internet life than most Internet users. You probably do too. (For a great reminder of this, see the video where Google sent a guy to Times Square asking people if they knew what a browser is. They don’t.)
But, given that caveat, here’s what we think the average consumer’s “Internet life” will entail in the coming years:
- Consuming lots of content that used to belong on TV, in theatres, in print and on the radio.
- Facebook and Twitter-style communication.
- Lots of gaming.
Here’s how we think a new Yahoo homepage can address those cornerstones of the consumer’s “Internet life.”
Media consumption. Yahoo must worry about making sure its home page is the place where its users expect to find the content they want to read, watch, or listen to.
Consider this report from AdWeek, which suggests that more people than you think are quitting cable to watch TV on the Internet:
“According to Pew, 22 per cent of American adults say they have cut back or canceled cable in the past year (while only 9 per cent have cut back on paying for Internet services). And within that cable-cutting segment, 32 per cent say they’ve taken the step of connecting their computers to their TVs to consume Web video, a step that until recently had been intimidating to most Americans. “
That ~7% of consumers that killed their cable to watch TV online — using Hulu, iTunes and Amazon — is still a very small number. But clearly, convergence is growing. To make sure its the centre of its users’ “Internet life” Yahoo has to make sure its the centre of users content consumption life.
To us, that means:
- When a user opens Yahoo.com, the top box should be cued-up with that user’s favourite unwatched shows, sucked in from wherever — Hulu, iTunes, Amazon, YouTube or even the user’s Tivo box. Lunch time is the new prime time. Yahoo should get a commission on the paid content and a hefty portion of any ad revenues.
- People listen to music at work. There should be a toggle button right on the Yahoo homepage to turn Internet radio on or off. This radio could be provided by any number of competing third-parties, from Last.fm to Pandora to AOL Radio.
- We love Instapaper, the iPhone app that lets you send any article on the Web directly to your iPhone with one click. Yahoo should clone this app and make it multimedia. Every piece of content on Yahoo should have a “view/read later” button to send content to their phones for later consumption.
Communication via updates, a la Facebook and Twitter. Yahoo already has some Facebook integration. This is good. But it has no Twitter intergration, other than the ability to subscribe to individual users as RSS feeds in My Yahoo.
The Yahoo.com home page should be the home of the best Web-based Twitter app. An easy solution: clone the functionality of one of the popular iPhone apps and stick it on the margin of the homepage. In order to encourage use of the app, Yahoo should import and actively curate and improve Twitter’s suggested user-list.Until users sign up on their own or sign in with their own Twitter account, the app should be “following” a single Yahoo-operated account that re-tweets the best stuff from Twitter.
Gaming, Social gaming is turning into a real business. Last week, we spoke to Mark Pincus, CEO of Zynga. He told us his startup is profitable and we’ve heard his company will reach over $100 million in revenues in 2009. It makes that money when users buy virtual goods that help them along in the games.
Zynga is already more popular than all of Yahoo Games. Its game FarmVille added 12 million users in the last two weeks.
Most of Zynga’s games are played by Facebook users on Facebook. Soon, Facebook plans to get in on all that virtual goods action by offer its users a “Pay With Facebook” button. If users get used to that form of payments, Facebook could put “Pay With Facebook” buttons on e-commerce sites all over the Web, opening a huge new line of business.
There is no reason Yahoo can’t be doing all this too. It has hundreds of millions of users. MySpace is Facebook’s only real competitor, and it’s faltering.
Here’s what Yahoo needs to do:
- There should be a more prominant social games module on the Yahoo.com homepage, filled with games created by third-party developers.
- At the very least, Yahoo should import the Facebook platform as a module on its homepage. Yahoo could ask for a slice of any “Pay With Facebook” revenues earned on its domain.
- Start including daily active users (DAU) into its internal metrics. Aim to beat MySpace.
Bottom line: Yahoo.com needs much less Yahoo and much more of the rest of the Internet if it wants to be at the centre of its users’ “Internet lives.” Otherwise its just fooling itself.
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