If imitation is the sincerest form of flattery, then Facebook Inc. (NASDAQ:FB) may very well be getting high praise from Yahoo! Inc. (NASDAQ:YHOO) and its first-year CEO Marissa Mayer, as Mayer is putting her site through a major revamp and is using Facebook’s social platform as a model.
Mayer stated this week in a blog post that Yahoo! Inc. (NASDAQ:YHOO) is revamping its homepage to give it more of a Facebook Inc. (NASDAQ:FB) feel, complete with a newsfeed and “likes” that can be shared with friends. Mayer said that Yahoo! users would be able to login using Facebook IDs nd would have access to various content like videos, articles and birthday notices. In seven months on the job, Mayer has apparently stopped the hemorrhaging with revenue, but it has to turn around its fortunes quickly, as companies like Google Inc. (NASDAQ:GOOG) and Facebook Inc. (NASDAQ:FB) have been growing their advertising market share, even taking some market from Yahoo! itself.
So if it’s having a hard time beating Facebook Inc. (NASDAQ:FB), why not imitate it? The question with this, though, is whether Yahoo! Inc. (NASDAQ:YHOO) can take this Facebook imitation and turn it into heavy traffic that imitates Facebook’s billion-plus users. Mayer addressed the changes in an interview on NBC’s “Today” show. “We wanted it to be familiar but also wanted it to embrace some of the modern paradigms of the Web. One thing that I really like is this very personalized newsfeed; it’s infinite and you can go on scrolling forever,” she said.
It is expected that this alliance between Yahoo! Inc. (NASDAQ:YHOO) and Facebook Inc. (NASDAQ:FB) may also involve Yahoo! getting some access to the volumes of data that Facebook owns about its users, which then may help Yahoo! increase its advertising revenue and user engagement.
What do some analysts think about Mayer’s moves?
“This is definitely an important step,” said Sameet Sinha, analyst at B. Riley Caris, about the revamp of the Yahoo! Inc. (NASDAQ:YHOO) home page and overall site format. “The Yahoo home page is one of the most important things because it is the first interface. It’s familiar in terms of layout, the newsfeed is interesting, and it will be interesting to see how it develops over time. The key will be how data is aggregated within Yahoo and Facebook.”
Yahoo! Inc. (NASDAQ:YHOO) posted $5 billion in revenue in 2012, which is flat compared to a year ago and down from $6.3 billion in 2010.
What do you think about his change? Do you think it will help Yahoo! Inc. (NASDAQ:YHOO) re-gain some traction in the marketplace? Will imitation of a successful platform elsewhere translate in the Yahoo! model? We’d like your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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