Yahoo (NASDAQ: YHOO) Refocuses On Core Areas, Shutting Down More Properties

Yahoo, Performance, ProgressLast Wednesday Yahoo! (NASDAQ: YHOO) released an update on its progress and future plans for product updates initially announced in March and April 2013. Yahoo! has struggled as a company to stay relevant in the search and display advertisement business the past decade; however after 5 different CEO’s in the past 3 years they have begun to make progress. 

Almost all of Yahoo!’s stellar stock performance in the past couple years can be attributed to the success of Alibaba Group. Yahoo! initially invested $1 billion in 2005 for a 40% stake in Alibaba Group.  It has since sold back about half of this stake, but still holds a 23% stake in a company expected to be worth more than $120 billion. 

Refocusing Effort

In an effort to focus more energy on successful properties, Yahoo! has shut down less popular products such as People Search and Xobni.  Xobni, which makes email and contact management apps, was acquired last summer. Yahoo! intends on incorporating features of Xobni with Yahoo Mail to better improve the user experience.

Future announced shutdowns include Yahoo Shine, Yahoo Voices, and the Yahoo Contributor Network.  Yahoo! plans on replacing the content users of Yahoo Shine with several new digital magazines that cover more specific areas such as Yahoo Beauty and Yahoo Travel. Yahoo Voices and Yahoo Contributor Network will be shut down by the end of August as the company shifts away from crowd-sourced written content. 

New Business Model

According to Yahoo!, focusing its energy on four core areas – Search, Communications, Digital Magazines, and Video – along with the engines that power them, Flickr and Tumblr, will help it make the biggest impact on people’s daily habits. Yahoo! hopes to fix its core business by using this platform of dynamic content to better engage its users and in turn offer more unique brand advertising opportunities. It is an approach that Yahoo! has utilized with some of its more popular properties such as Yahoo Finance. 

As of now shares of Yahoo! are still trading based off of its Alibaba Group investment, but moving forward it will be seen how these efforts impact its core businesses performance. 

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