Facebook Inc (FB), Google Inc (GOOG): Yahoo! Inc. (YHOO)’s 3 Biggest Problems Keep Holding it Back

It seems that Yahoo! is in a rut, treading water and unable to move forward. The company’s new CEO, Marissa Mayer, has plans to make changes that will get the company out of its current rut. In order to do this, she will have to address Yahoo!’s three biggest problems:

1. The time that users spend on its website: One of Yahoo! Inc. (NASDAQ:YHOO)’s biggest problems is that the time that users spend on its websites is “down a third from its high three years ago”. This has negatively affected their advertising rates.

2. Its lack of penetration into the mobile device market: Yahoo! currently has 200 million unique monthly users on mobile devices. This puts it in third place, well behind Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB). In order for Yahoo! to increase revenue, they will have to do better in this area. Yahoo! recently introduced a new Flicker app for Apple Inc. (NASDAQ:AAPL)’s iOS devices, which has been well-received and is a start in the right direction.

3. Its lack of a meaningful social networking site: This is an area were Yahoo! still has a lot of work to do. Marissa Mayer’s primary goal is to make Yahoo! a bigger player in the mobile internet industry. She has said “Yahoo will be one of — if not the — predominant platforms in the mobile era.” In the fourth quarter, she hired 120 new employees with computer science degrees. This move towards high tech employees fits into her plans to increase and improve Yahoo!’s smartphone apps.

New high tech employees will also help her improve Yahoo! Inc. (NASDAQ:YHOO)’s three most important internet portals, Yahoo! Mail, Yahoo! Finance and Yahoo! Sports. She ultimately hopes to make the Yahoo! websites fresher and more interactive. She also plans to provide Yahoo! users with a social networking experience, something that its web portals have not had. If Marissa Mayer is successful in improving the look and feel of Yahoo!’s websites, that will help the company improve upon its three major weaknesses.

The article Yahoo!’s 3 Biggest Problems Keep Holding it Back originally appeared on Fool.com and is written by Maxwell Fisher.

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