Yahoo overhauls its e-mail service

May 25, 2011|Associated Press

SAN FRANCISCO — Yahoo Inc. is giving its e-mail service a long-promised facelift in an attempt to make it more appealing to people who are increasingly using Facebook, Twitter, Google, and other online alternatives to communicate.

The changes build upon a redesigned e-mail format that Yahoo began testing seven months ago. The estimated 277 million users of Yahoo’s free e-mail service will be switched to the new version during the next few weeks.

The overhaul will enable updates to Facebook and Twitter accounts to be posted from within Yahoo’s e-mail boxes. The service is supposed to be two times faster and capable of sending attachments of up to 100 megabytes. Other tools include better junk-mail controls and the ability to chat with friends logged into Facebook.

Yahoo is counting on the changes to help attract and retain e-mail users at a time when more people are flocking to Google Inc.’s Gmail service.

Although Yahoo’s service remains larger than Gmail, it has been losing ground in the past year. Through April, Yahoo boasted 277 million e-mail users worldwide, a drop of about 3 million, or 1 percent, from the same time last year, according to comScore Inc. Meanwhile, Gmail grew to 220 million worldwide users, up 43 million, or 24 percent.

Most of Gmail’s gains appear to be coming at the expense of Microsoft Corp.’s Hotmail service, which remained the global leader with 327 million users, according to comScore. But that figure was down 27 million, or 8 percent, from last year.

Cultivating loyal e-mail users is important because they tend to be frequent visitors and they often remain logged in when using other online services run by the e-mail providers. The return trips and logged-in activity creates more opportunities to show Internet ads.

The e-mail upgrade is expected to be among the signs of progress that Yahoo chief executive Carol Bartz emphasizes today when she and other top company executives are scheduled to update analysts on their turnaround plan.