Yahoo! Takes a Page From Instagram (Update 1)

Updated from 8:28 a.m. EST to provide executive comments regarding app updates in the fourth paragraph.

NEW YORK ( TheStreet) -- When Yahoo! ( YHOO) CEO Marissa Mayer said we'd see more frequent updates to Yahoo!'s apps, she wasn't kidding. Now, Flickr is the beneficiary of another overhaul.

Yahoo! has updated its iOS Flickr app to have more " Instagram-like" features, including a new set of filters to personalize your photos. There will be some live filters, which you can preview before you take your picture, and there are ones you can customize as well.

In addition to the new filters, Flickr is adding new camera tools, allowing photographers to edit their photos with grids, a pinch-to-zoom feature, and the ability to lock onto a focus and exposure point. These are all features that Instagram has, so it's clear the trend for photo-sharing networks is to continue adding tools to keep people more engaged.

On Yahoo!'s earnings conference call in April discussing first-quarter results, Mayer noted that Flickr was seeing vast improvements in engagement.

"The recent updates to Mail and Flickr continued to yield stronger engagement in Q1. Since launching the new Yahoo! Mail for iOS, Android, and Windows 8 daily active users on our apps are up more than 50% (inaudible) new found presence and multiple platforms. By improving the speed and performance of our products, our users responded by doing more on Mail and Flickr. For example, photo uploads on our Flickr mobile apps have increased over 50% quarter-over-quarter."

Yahoo! is also taking down the paywall on some of its Pro features, allowing photographers to enhance their photos for free, whereas this was a pay feature in the past. Photographers can now crop, sharpen, adjust color, use levels, and add vignettes. Mayer has said in the past that Yahoo! is the world's "daily habit," and taking pictures is something people do on a daily basis. By making these editing tools free, Mayer is trying to build an Instagram-like community for Flickr.

In June, Instagram co-founder Kevin Systrom announced that Instagram, which is owned by Facebook ( FB), has more than 130 million active users.

Mayer has repeatedly said that enhancing Yahoo!'s core features, especially on mobile, is a priority for the company as it looks to monetize its 700 million-monthly users. In Yahoo!'s second quarter, the company generated $1.07 billion in revenue, as display revenue excluding Traffic Acquisition Costs continued to struggle, falling 11% year-over-year to $423 million.

Yahoo! is working on increasingly getting product updates out in a faster time frame, and this Flickr update, coupled with the one in May, shows Mayers' attention to improving its offerings. She noted this on Yahoo!'s second-quarter earnings call, saying we could see more updates soon. "So I really think what you're going to see is that Yahoo!'s products will be releasing with small changes much more frequently and there'll even be what I would call version updates, much more frequently, particularly on mobile and on the website."

Flickr also received a major overhaul in May, as Mayer and her team unveiled a new Android Flickr app, new HD resolution thumbnails, and allowed users to have 1 TB worth of storage for free.

There are also signs Mayer's continued focus to improve Yahoo!'s core properties is working. Yahoo! surpassed Google ( GOOG) in Web traffic for the month of July, as 87.2% of the 225 million U.S. Internet users visited a Yahoo! site.

Equity markets have responded to Mayer's efforts to turn the company around. Shares are near their 52-week high, having gained 36.2% year-to-date.

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-- Written by Chris Ciaccia in New York

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