Yahoo! ( YHOO) wants to be more like Google ( GOOG). Yahoo! is considering redesigning its front page to make its search engine more prominent. Shares in both Internet leaders have been hit hard this year as investors have started reassessing the growth prospects and competitive landscape of the lucrative online search business. The redesign would be the first major overhaul of Yahoo!'s front page since 2004. The discussions underscore the emphasis that the Sunnyvale, Calif., company is placing on search. comScore Networks estimates that Yahoo!, the No. 2 player in the U.S. search market, has 29% share, trailing only Google's 41%. Yahoo!, which also is considering dangling prizes before users in hope of boosting the use of its search engine, is testing the changes to select users, according to
Internetnews.com . Investors are keenly interested in Yahoo!'s progress in search, especially since Chief Financial Officer Susan Decker told Bloomberg News in January that the company's goal wasn't to be No. 1. She said that Yahoo! would be "happy" to maintain its market share. "It is an issue," says Martin Pyykkonen, an analyst with Hoefer & Arnett who rates Google a buy and Yahoo! a strong buy. "It's a 50-50 split among investors who think that Google will maintain its lead and those who think Yahoo! will close the gap." In addition to Google, Yahoo! also is facing increased competition from smaller rivals in search, including Microsoft's ( MSFT) MSN and IAC/InterActiveCorp's ( IACI) Ask.com. The changes at Yahoo! would put tabs for the My Yahoo! content reader and email on the left side of the screen and large icons for popular features such as email and weather on the right side, according to Internetnews.com. Tabs for news, sports and financial news would be in the center of the page, below the search box, which would be next to the company's logo.
Yahoo! is providing selected users a glimpse of the proposed design as part of its market research. The company declined to release screen shots of the new look it is contemplating, though images are available on the Internetnews site and other places on the Web. "Part of this process includes ongoing efforts to provide an even more relevant experience by continuously building upon Yahoo!'s strengths in content, community, personalization and search," says Meagan Busath, a company spokeswoman, in an email. Most Wall Street analysts encourage investors to buy shares of Yahoo!, which are down 23% this year, figuring that the same trends that are helping Google will also help Yahoo! to a lesser extent. But Google shares have lost almost as much, dropping 18% after a fourth-quarter earnings miss and a series of investor-relations gaffes.