Is Yahoo back from the dead?

Part of Yahoo's new campaign

In recent years, Yahoo has been struggling to keep their title as an 'internet giant'. Once the market leader, it has been overtaken and supersede by Google. The recession made things worse for the company with advertisers trimming back their budgets despite Google appearing seemingly indifferent to the financial chaos rocking the sector. However, in recent months, that has all changed.

With Carol Bartz replacing co-founder Jerry Yang in January as CEO, the company has dramatically changed direction. Firstly, over 2000 job cuts has seen the company see its profits surge by more than 300 percent and then, this month has seen the relaunch of its new web portal on the back of a $100m global advertising campaign.

Not just that, but they've climbed into bed with a leader in the technology sector: Microsoft. Their 10 year partnership deal will see the two companies combine technologies, share revenues and swap ad search sales staff between the two tech and ad giants.

Bartz has said she hopes the new branding, new deals and streamlining of the company will impress advertisers, boost traffic and revenues as well as bring back customers.

"We're really revisiting everything. Where it makes sense, we will sell, and where it makes sense, we will shut down. The focus of the company is really to engage and personalise Yahoo! for the users and to do that we need to be ready to put our signature on the bottom of every page on the internet that has Yahoo! on it," said Bartz.

It's Y!ou

The new web portal will see users able to integrate third-party web services like Facebook or Hotmail into their Yahoo web-page.

"We knew the new management could drive some of the cost out of the system, but we want to start to see what can be done to have the company return to growth," said Olin Gillis, an analyst at Brigantine Advisors, said speaking to the BBC.

"This is a company that's still very much in the process of being restructured. It's a mild positive. They're doing what they're supposed to be doing."

And what they're doing seems to be working. Already results from Yahoo's new web portal seems to be yielding positive results, with forecasts for current quarter sales already beating analysts' expectations. Yahoo's success also adds credence to the general feeling the online ad slump may be ending, especially with the company's strong display ad sales

Revenue from those so-called guaranteed ads, whose placement is planned in advance, grew at a mid-single-digit percentage rate. This was much better than "non-guaranteed" ads, which ran on pages with less valuable audiences, such as email. Those ads declined, partly thanks to a recent Yahoo drive to rid itself of lower-quality ads for weight loss and other schemes.

As a result, Yahoo has said it expects gross revenues of $1.6 billion to $1.7 billion in the fourth quarter. In would appear that right now, Yahoo! is quickly becoming a contender again... but whether it's enough to seriously challenge Google remains to be seen.

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