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updated: 12/24/2012 5:59 AM

Yahoo upgrades e-mail to lure back customers

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Bloomberg News

Yahoo! Inc. upgraded its e-mail service to woo mobile users, the first major product unveiling since Chief Executive Officer Marissa Mayer took over with a mandate to improve tools and services to lure back customers.

The revamped e-mail service is designed to be faster and easier to navigate on the Internet, smartphones and tablets, the Sunnyvale, California-based company.

Mayer, a former Google Inc. executive, is seeking to reverse three straight annual sales declines by updating widely used products, including mail, the Yahoo Messenger chat service and Yahoo's home page. The efforts are poised to stoke competition with her former employer, which has added millions of users to Gmail as Yahoo Mail has stagnated.

"I don't think this in itself will be what saves Yahoo," Shar VanBoskirk, an analyst at Forrester Research Inc., said in an interview. "This looks like a nice feature set. It certainly looks like it will be a cleaner experience for e-mail users."

The shares rose less than 1 percent to $19.52 at the close in New York. The stock has gained 21 percent this year.

Versions of the new e-mail will be available for devices running software such as Microsoft Corp.'s Windows 8, as well as Apple Inc.'s iPhone and iPad and machines powered by Google Inc.'s Android operating system.

"Because mobile is everything these days, Yahoo! Mail now has a consistent look and feel across devices," Mayer said on the blog.

Yahoo products have failed to keep up with changes in online habits, the CEO said on a call with analysts in October.

Internet communication is "primed to be re-imagined," Mayer said on the call. "There is great opportunity to modernize Yahoo Mail and Messenger, especially given the continual increase in the amount of communication we're all receiving."

The CEO has said she plans to invest in hiring engineers with expertise in mobile applications, boosting the company's technology for buying and serving ads, and building services that are more personalized for individual users.

Mayer kicked off her Yahoo comeback strategy by hiring several senior deputies, including Henrique de Castro, previously Google's vice president of global partner business solutions, as operating chief. Mayer promoted Adam Cahan, founder of a social-TV startup acquired by the Web portal last year, to lead mobile services at the company.

Yahoo's U.S. e-mail user base slipped to 77.7 million people in November, down from 92 million a year earlier, according to market researcher ComScore Inc.

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