Yahoo's home page to get makeover

SUNNYVALE, Calif. - Yahoo Inc. is preparing to tweak several popular sections of its Web site, including its home page, during the next few months to accommodate more material from rival services as the Internet company tries to polish its tarnished franchise.

The makeover outlined for reporters Thursday represents another a key step in Yahoo's push to regain the momentum that it lost while being outmaneuvered by Internet search rival Google Inc. and more recent upstarts like the rapidly growing online hangouts MySpace and Facebook.

Yahoo's previous dawdling crimped its profits during the past two years, leading to a dramatic downturn in its market value that triggered an unsolicited takeover bid from Microsoft Corp. this year. (Msnbc.com is a Microsoft-NBC Universal joint venture.)

Since Microsoft withdrew its $47.5 billion bid in May, Yahoo has been battling to boost its stock price, which recently sunk to its lowest level in nearly five years. Yahoo shares climbed 85 cents Thursday to close at $18.55 — well below Microsoft's last offer of $33.

Boasting 500 million users worldwide, Yahoo is hoping to bounce back by becoming an even more indispensable vehicle for Web surfers and advertisers. As part of that process, the Sunnyvale-based company has been spotlighting more content from other Web sites and extending its advertising network so it can run ads on more Internet properties.

Yahoo plans to open up more with the first major redesign of its home page since May 2006. The changes will enable Yahoo users to plant more mini-applications known as "widgets" on personalized versions of the home page, said Ash Patel, executive vice president of the company's audience product division.

In a demonstration, Patel showed how Yahoo users subscribing to the online DVD rental service Netflix will soon be able to review their latest movie requests and ratings without leaving Yahoo's main page. Yahoo is hosting a conference for outside developers Friday in hopes of cultivating more applications for its new home page.

Patel declined to specify when the redesigned page will be unveiled, saying only that it will begin gradually within the next few months. "You will see a rolling thunder kind of thing," Patel said.

Yahoo also plans to open up its music section to rival services like Apple Inc.'s iTunes and Amazon.com Inc. during the next few weeks, said Scott Moore, who runs Yahoo's media operations. Moore said Yahoo's news section also will start to feature more local content from newspapers around the nation.

Another one-time Internet darling, Time Warner Inc.'s AOL, announced a similar redesign this week, opening its home page to content from rival companies in a bid to broaden its appeal to users who have endless choices online.

On the marketing front, Yahoo still plans to begin an advertising partnership with Google next month despite an intensifying antitrust investigation by the U.S. Justice Department.

Yahoo thinks it can boost its annual revenue by $800 million by relying on Google's technology to sell some of the ads on its Web site, but the partnership has raised concerns about diminished competition because the two companies combined control more than 80 percent of the U.S. search advertising market.

In a move that could foreshadow a formal legal challenge, the Justice Department has hired an antitrust lawyer to review the evidence collected in an inquiry that began even before Yahoo announced its partnership plans with Google in June.

Because they aren't exchanging stock or cash, Yahoo and Google could have launched their alliance months ago but voluntarily waited until October to allow antitrust regulators to assess the situation.

Yahoo plans to start posting some ads from Google at an unspecified date next month, even if the Justice Department hasn't completed its review, said Hilary Schneider, who oversees Yahoo's U.S. operations. Google Chief Executive Eric Schmidt has expressed the same intention.

"We are confident we can get (regulators) comfortable" with the partnership, Schneider said Thursday.