Finally, Yahoo! Delivers

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I've long been a critic of Yahoo! (Nasdaq: YHOO  ) for failing to innovate. Not anymore. Today the Excited Y is due kudos for a clean, smart upgrade to Yahoo! Mail.

Though not quite the overhaul called for by Henry Blodget of Business Insider in October, the beta version of the new Yahoo! Mail gets close. It's the most attractive alternative to Gmail I've yet seen.

Giving the pundits most of what they wanted
More on what distinguishes the new Y! Mail in a minute. First, let's review Blodget's checklist from last fall:

"Restoring Yahoo Mail, Messenger, et al, to their former glory will require immediately building the best integrated communications suite available -- one that integrates contacts, email, voice, instant-messaging, AND external services like Twitter and Facebook," he wrote at the time.

Yahoo! both succeeds and fails in meeting Blodget's expectations. Extra tabs for contacts and social media updates are a welcome change, but the updates tab is the bigger disruption between these two.

Essentially, it's a stream of posts, links, and musings from friends and contacts on social media. Allowing me to sharpen results via filters would make for a nice improvement, but that's hardly a complaint. Google (Nasdaq: GOOG  ) and Microsoft (Nasdaq: MSFT  ) would do well to include a version of the update tab in their own services.

Blodget's right. Mail and social media are natural partners. Facebook figured this out with its new messaging service that collates IM and mail into searchable contact threads. Yahoo! hasn't gone that far with the new Y! Mail but it also didn't need to. Instead, the interface makes it easy to get most of what users need to stay connected.

More to do
Yet the service isn't complete. Voice integration is noticeably absent, and while it's nice to have a series of app add-ons -- PayPal integration is interesting, for one -- it would have been better to integrate all IM services into the main mail window. I wasn't able to add iChat, which doubles as my AOL Instant Messenger account.

Finally, as a productivity tool, Y! Mail's Automatic Organizer pales in comparison to the smart folders I use in Gmail. There's also no obvious way to archive messages that I don't want to see but might want to archive and refer back to at another time. Archiving is Gmail's most attractive feature; it demonstrates the power of the search engine while freeing my brain from electronic clutter.

But again, that's a minor complaint. It's been a while since I was able to say I like and plan to use a Yahoo! product. Yet that's what I'm saying today. Y! Mail is a winner. Well done.

Do you agree? Disagree? Let us know what you think in the comments box below.

You can also rate Yahoo! in Motley Fool CAPS and keep tabs on the company by adding the stock to your watchlist for free, personalized stock tracking.

Google and Microsoft are Motley Fool Inside Value picks. Google is also a Motley Fool Rule Breakers recommendation. Yahoo! is a Motley Fool Global Gains selection. Motley Fool Options has recommended members open a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Google, Microsoft, and Yahoo!. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy refuses to lose its fight to up the disclosure ante on Wall Street.

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