22 July 2009 | Author: L. Sutherland Head of Media Content

Yahoo! splashes cash on self

Yahoo! has been spending a lot of time shining up its image recently, largely due to new CEO Carol Bartz, and now it seems that the search engine plans to spend some cash on itself too.

Despite still languishing in the revenue stakes, Yahoo! has announced that it will be ploughing $75m into new hires, new tech and a new round of advertising.

However, while Yahoo! isn't exactly raking it in compared to rivals such as Google, the search engine has in fact managed to turn itself around recently - although revenues declined 13 percent in the second quarter, the blow was softened by a profit climb of 8 per cent - beating the expectations of most analysts.

According to the New York Times, Yahoo! has revealed that it has a new round of product investment and rebranding in the pipe-line. While this will result in a temporary drop in profit, it makes sense as a long-term plan for a company that is keen to leave the stick-in-the mud image it has been tarnished with behind. The recently revealed brand-spanking new Yahoo! homepage should also help to this end.

The Register reports that Carol Bartz explained her plans during a conference call with industry analysts and reporters. She said: "We're hard at work on plans to reposition our most valued asset: Yahoo!'s brand.

"Our Q3 plans include an initial wave of incremental marketing spend, which will increase substantially into Q4 and next year."

As Yahoo! lags far behind Google when it comes to making money from ad platforms, the search engine plans to tweak these in a bid to tempt more advertisers - and buyers. Bartz said: "We need to ensure our ads are more relevant and quite frankly less irritating to users.

"We're now focusing on search and display ads improving relevancy, decreasing frequency of some ads, and potentially eliminating others."

Such as round of improvement are likely to gain approval around the board and if Yahoo! spends its money wisely, it could find itself set to bring in much more.

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