Yahoo! Hires Hotmail Vet to Manage Mail, Flickr, More

While most of the recent personnel news surrounding Yahoo! has dealt with who has left the company rather than who has joined it, the company is expanding its efforts in communities, social and communications, building out a corporate roster below Carol Bartz that features many former Microsoft and MSN alumni, looking to restore the company to its once lofty leadership position on the Web. Joining the purple people on Monday was Steve Douty, one of the first five employees at Hotmail during the Web 1.0 days, tasked with owning product management as the vice president of communications and communities, including properties such as Yahoo! Mail, Yahoo! Messenger, Yahoo! Groups, Flickr and Yahoo! Answers.

Reporting to Bill Shaughnessy, the company's senior VP of global product management, who in turn reports to Blake Irving, Yahoo!'s chief product officer, Douty is responsible for product strategy and roadmap to rollout for the products' current offerings and their future plans, including how they would be monetized.

Like its counterpart at Google, Yahoo! has struggled in some cases about delivering uniformity of product between properties - even while Yahoo! Mail and Flickr especially have maintained top positions in terms of global use. In talking with Douty on Friday, he told me that one thing the company could do a better job with is focusing on integrating these services, and keeping a user longer, aiding them to "go deep into Yahoo and then naturally experience other services in a highly integrated and relevant way", using another Yahoo! property. This hope mirrors a similar challenge experienced by the MSN team during his time there following Microsoft's acquisition of Hotmail at the end of 1997.

Douty, whose Linkedin resume includes stops at Moxie Software and Groopix after Microsoft, joined Hotmail in June of 1996 as the first businessperson at the company, running marketing, product, sales and business development, he said. He recounted to me stories of jump-starting the adoption of free Web-based e-mail through college newspaper advertisements, and making the user experience incredibly simple, including getting a new personal e-mail address within a minute of entering the site and sending a message in the second minute. "In two minutes, you could compose and send a message with your own mail ID," he told me in a face to face meeting last Friday. This led to significant word of mouth for Hotmail that rivaled or even outperformed the service's much-celebrated viral capabilities, including the standard email signature.

Yahoo!'s no upstart, and handful of newspaper ads on college campuses isn't going to turn the trick to get the company back to being recognized as an innovative leader in the Web space. But Douty said he thinks there is significant opportunity for the company to grow from its current position, and capitalize on positions where competitors are not strong.

"There are a lot of incredible assets (at Yahoo!) that have not been adequately stitched and integrated," he told me. "Those assets, combined with a new fresh look on how people use the Internet and interact with others gives everyone an opportunity. There is an opportunity now for a brand-new entrant and a creative set of new offerings for people who are not being served well by anyone today, and Yahoo! is in a position to capitalize on that."

For starters, though Douty is in his first week on the job, it's possible Yahoo! Mail could play a connecting role with the many other services he owns, maybe not as the primary event, but as a conduit to other properties. He recounted Hotmail's challenges with spam, saying Yahoo! and Gmail both do very well at combating spam, and also said Yahoo! Mail is one of the Web's biggest photo properties, simply when photo attachments are included.

Yahoo!'s fight is no longer for search market share against Google. Like Apple's futile OS war against Windows, the time has come to look beyond those initial battles and find new ground to shine. Douty hopes his efforts, and being reunited with many former MSN colleagues, will be key in the company's similar turnaround. Of note, other MSN alumni include both Blake Irving and Bill Shaughnessey as well as John Matheny, the senior vice president of engineering at Yahoo!. With Office and Windows being revenue royalty at Microsoft, MSN never quite got the opportunity to lead in Redmond. In Sunnyvale, Web services are king.

Disclosures: Steve Douty is a director for MenuMax, a Paladin Advisors Group client. He holds the same role for Groopix Inc, a Paladin client in 2009. I am cofounder of Paladin Advisors Group.