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Originally published Sunday, May 29, 2011 at 10:00 PM

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Ex-Microsoft exec heads Yahoo's return to relevance

After years of losing ground to rivals, Yahoo hired former Microsoft executive Blake Irving to hook up the huge but dormant site with innovative products and new blockbusters that will win Internet users' attention and attract advertisers.

The New York Times

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SUNNYVALE, Calif. — In listing his biggest accomplishments as Yahoo's product chief, Blake Irving gave an answer that speaks to the company's painful legacy of layoffs, aimlessness and stalled growth.

"I helped create some belief," he said.

Yahoo has amassed one of the largest online audiences in the world — 680 million users. It is the fourth-largest site; only Google, Microsoft and Facebook are larger. Yet it does not get the same kind of respect from the public, from advertisers and certainly not investors, who have grown impatient waiting for the turnaround promised by Carol Bartz, Yahoo's chief executive.

So last year she hired Irving, a former Microsoft executive, to give Yahoo a lift.

Yahoo's email service and news sites attract more than 250 million users; if they were stand-alone sites, they would rank among the largest in the world. Its sports, finance and news sites are among the company's most visited properties.

But after years of losing ground to rivals as the company tried to fight Google in search, battled Microsoft's takeover attempt and neglected some of those core properties, Yahoo is seeking innovative products and new blockbusters that will win Internet users' attention and attract advertisers.

Since starting, Irving said, he has created a new vision for Yahoo's products, cleared a path for building them and given discouraged workers something to believe in.

But innovation has been slow during his tenure, and the company's finances have yet to improve. Revenue declined modestly in 2010 while competitors like Google gained. It is expected to be much the same story this year.

Yahoo has to keep up with a rapidly evolving industry, said Benjamin Schachter, an analyst for Macquarie Securities. Its efforts in social networking failed, and it outsourced its Web search to Microsoft. Yahoo now faces the risk of losing any presence on mobile devices, where people are spending an increasing amount of time.

"They need to remain relevant," said Schachter.

Irving has improved many of the company's products, Schachter said. "They seem to be moving in the right direction. We just want to see it in the numbers."

Irving, 51, is central to the turnaround effort. Bartz lured him a year ago from the rolling campus of Pepperdine University in Malibu, Calif., where he was a business professor. She wanted to tap his 15 years of experience in building products for one of the biggest online audiences, at Microsoft.

As vice president for Microsoft's online platforms group, Irving oversaw most of that company's sprawling Internet empire. He had also held a variety of product roles for major Microsoft services like Hotmail, MSN Instant Messenger and NetMeeting, the video conference platform.

Irving said he would not have joined Yahoo if he thought it would be impossible to bring back its luster. In recent years, what Yahoo was doing right got unfairly lost in the focus on what it was doing wrong, he said.

Prabhakar Raghavan, Yahoo's chief strategy officer and head of its research labs, pointed to a memo Irving had sent out that said, "celebrate success, not launches."

Yahoo is taking a low-key approach to its products under Irving. Instead of introducing a slew of new services and hoping for excitement, it has been making minor upgrades to existing products.

One of Yahoo's more ambitious enhancements is Search Direct, which lets search engine users get answers without having to click on the results.

A new version of Yahoo Mail is being tested that is supposed to make the service faster and better at deleting spam.

And Flickr, Yahoo's photo storing site, will soon have a new photo browsing feature.

Livestand, a digital newsstand for the iPad, is one of the exceptions, a new product rather than an improvement on an old one. It is among Yahoo's biggest bets made by Irving. The new app, which is supposed to make its debut later this year, will let users create personalized digital magazines. Publishers are still being recruited for the effort.

Making more inroads on mobile devices like the iPad is vital to Yahoo.

Yahoo has created about 18 iPhone and iPad apps, and it struggles to build ones that set it apart from the competition.

Last month, it acquired IntoNow, an app that lets television viewers socialize and that recognizes shows by analyzing just a few seconds of audio dialogue.

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