Yahoo! takes wraps off Open Strategy

Yahoo! on Monday flipped the on switch for a massive project to increase activity - and advertising - on its internet sites through social connections and online applications.

The company has been working mostly behind the scenes to build what it calls the Yahoo! Open Strategy but now the strategy's changes will become evident to US users of some of Yahoo!'s main properties such as Yahoo! Mail, My Yahoo!, and Yahoo!'s music and TV sites. In addition, the company will begin previewing a new Yahoo! Toolbar later this week.

Ash Patel, executive vice president of Yahoo!'s audience products division, said of the Yahoo! Open Strategy goals: "We wanted to establish a social dimension." And to attract programmers who can build applications on Yahoo! properties, "We wanted to engage with the developer community and to open up the power of Yahoo!'s products and platforms."

Yahoo! Mail, which according to ComScore has about 275 million active users each month, gets some significant changes, with more to come. First is a new welcome page that now spotlights messages from people in a person's Yahoo! social network and invitations from others to join their networks. And the inbox page now includes a new "from connections" button that shows email only from those social connections.

Second is the arrival of online applications tied to Yahoo! Mail. One inaugural program from Xoopit lets users view all the photos in their email archive, even expanding links to online galleries. Another lets users convert an email message into a WordPress blog post in two clicks.

John Kremer, vice president of Yahoo! Mail, speaking to reporters at a launch event said: "The opening of the mail platform is a huge benefit to users in terms of the additional forms of sharing and communication we can build in and to the developers who can build applications."

The new mail abilities require the co-operation of Yahoo! users' contacts: they must agree to be listed as a contact before they can become a part of Yahoo! social activities. That's because of privacy considerations, Kremer said.

It's not all fun and games. Building use of Yahoo! into members' social lives and letting them use applications housed on Yahoo! sites means more advertising for Yahoo!. That was important earlier this year when the company was stagnating financially but it's even more important now that the recession has put extreme pressure on the ad market. And executive VP Patel believes the ads that can be delivered with the social context - for example clicking on the Yahoo! Music page for an album a friend just rated highly - will provide valuable context for advertisers.

"Targeted [ad] inventory sells better than untargeted inventory," Patel said.

The Yahoo! Open Strategy theoretically could help Yahoo! keep up with competitors. Although Yahoo! capitalised on the first generation of online social activity, email and instant messaging, it lagged behind rivals such as Facebook when it comes to letting people build online communities of friends and business contacts. Yahoo!'s new strategy, though, is tuned to its own assets.

Google has got a powerful search engine but its online community is nascent compared to Yahoo!'s. Facebook and MySpace have got social ties but not Yahoo!'s breadth of finance, sports, entertainment, news, and communications. Yahoo! Open Strategy is a recipe not easily reproduced in full by Yahoo! competitors.

Original article: Yahoo puts meat on Open Strategy bones from CNET News.com