Yahoo!'s brave new world: search and news for the mass market

As Marissa Mayer took to the stage in Las Vegas, there was a sense the 38-year-old chief executive of Yahoo! was in uncharted territory. The Consumer Electronics Show is where the latest gadgets are unveiled. Dominated by curved ultra-high definition TVs and a plethora of smart devices, from toothbrushes to chopping boards, it is not usually a place for websites, even if they are the size of her company.

But the move typifies what Mayer is seeking to achieve at Yahoo! In a series of acquisitions the company has bought more than 20 tiny websites specialising in everything from blogging with Tumblr to the "social web browser" RockMelt. She has sought to radically alter Yahoo!'s staid image, and her keynote speech in Las Vegas last week was simply the latest on a journey that has culminated in Yahoo! attracting more visitors to its sites than Google for the first time in two years. The event itself, however, was a change in presentation if not in substance: Mayer unveiled a new technology news site, run by former New York Times columnist, David Pogue, a site focusing on food, and the News Digest app by the British web prodigy Nick D'Aloisio.

Her explicit aim is to refocus Yahoo! on search, content and video. "Yahoo! is simplifying its business and simplifying the way it delivers information," she said. Mayer is taking much of the game plan from Google, where she was a key, and sometimes controversial, early employee. So, while it was easy to be lost in the glitz of her CES presentation, the third of it that focused on advertising was the most important. In short, Mayer's plan is to smarten up and streamline Yahoo!'s ad products by integrating mobile and desktop products. While all the new content may be appealing, Mayer's plan is to make Yahoo! a globally important portal for the web.

Her plan is that with good content augmenting a search engine, Yahoo! can mix ads that are sold against its own content with the search ads that mean Google now earns $6.30 from each web user. David Pogue told the CES audience that, for technology coverage, the expert and the novice audience is well-served but, in the US at least, the mid-market lacks trusted sources.

Yahoo! will offer a reliable product that is easily accessible to the mainstream. Similarly, D'Aloisio's News Digest app appeals to users who lack the time and the inclination to dive deeply into the issues of the day. But it is aimed explicitly at people who want to be fed a small amount of important and entertaining news. In short, the new Yahoo! is a media and advertising company that hopes it will find a new fortune in middle America. As Mayer put it: "It's increasingly difficult to find the news you need or want.

This problem has led to the issue of tl;dr." That's "too long; didn't read" continuing Mayer's penchant for web acronyms. And, indeed, while Yahoo! has faced many well-documented problems, it is still a company with more than 12,000 employees making almost $570m profit last year. This is a giant that may well have fallen out of the zeitgeist, but it remains one of the world's largest sources of news. Mayer's first year as chief executive has already been a remarkable success.

Its stock price has nearly doubled to about $41 per share and she was recently No 1 on Fortune's "40 Under 40" list, making her the first woman to earn that honour. Perhaps more importantly, she's garnered Yahoo! the attention it had surrendered to Google, Facebook, Twitter and even Microsoft. The aim is to prove that Yahoo! is not a web giant that will go the way of AOL. But the news is not all good.

Facebook is now the second-most important ad platform after Google, overtaking Yahoo! thanks to the growing importance of social advertising. In that area, and in homegrown innovation, Yahoo! is struggling to come to terms with the latest trends. Mayer's bid to make it more nimble is a step in the right direction, but not all those acquisitions have come cheap. "Yahoo!'s mission," Mayer said, "is to make the world's habits inspiring and entertaining."

It's a subtle difference from offering to change the world, as Google, Facebook and Twitter often have. Yahoo!'s strength is its ordinariness, seeking to appeal to the mainstream. As long as Mayer can ensure it remains as woven into the everyday lives of its 800m users, then her task will be straightforward. But her acquisitions imply that she knows remaining relevant will take a great deal more effort than simply presenting news in a shortened form.