April 21 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Carol Bartz said last month that she created a “wall of shame” for products she isn’t happy with. She’s counting on her top technology executive to fix them.

Ari Balogh, recruited as chief technology officer last year, added product-management duties in February after a reshuffling of the Sunnyvale, California-based company. Balogh now needs to chart the future of Yahoo’s more than 50 products - - from e-mail to online dating to the search engine.

“The biggest challenge is just the explosion of products that they offer to consumers,” said Carl Howe, an analyst with the Yankee Group in Boston. “It’s a lot to manage.”

Balogh, 45, is overhauling Yahoo’s products during the worst slump in online advertising since the dot-com bust. The company, set to announce first-quarter earnings today, may report an 80 percent plunge in net income from the year-earlier period, which included a one-time gain. Excluding revenue passed to partners, sales fell an estimated 11 percent, according to analysts in a Bloomberg survey.

Bartz, 60, took over as CEO in January. She said at an investor conference last month that apart from “core” products such as the home page, news and e-mail, “everything is up for examination” at Yahoo. She described Yahoo’s home page as old- fashioned and said she prefers Google Inc.’s maps site to Yahoo’s.

Trailing Google

Yahoo rose 72 cents, or 5.3 percent, to $14.38 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have lost almost 50 percent of their value in the past five years, compared with a quadrupling for chief rival Google.

Yahoo had 146 million visitors in the U.S. in March, an increase of 5 percent from a year earlier, according to ComScore Inc., a research firm in Reston, Virginia. Google’s users rose 10 percent to 151 million.

David Filo, who co-founded Yahoo 14 years ago, said Balogh’s technical background will help revitalize the company’s products. Yahoo, which previously had a separate technology group to support its products, is now combining the two functions.

“Bringing those together allows us to focus faster, more clearly,” Filo said in an interview. “We wanted to find someone kind of technical-focused, because at the end of the day, technology is what really drives a lot of these products.”

Internet Searches

Yahoo’s share of the U.S. Web-search market has settled at about 20 percent, compared with Google’s more than 60 percent. Microsoft Corp., which made a failed acquisition bid for Yahoo last year, ranks third.

In some areas, Yahoo is falling further behind. Visitors to Yahoo Maps dropped 14 percent last month, compared with 27 percent growth for Google’s maps site.

Still, consumer preferences on the Internet can change fast, Balogh said. To win back users, Yahoo is working on a new home page and is developing features that work better with other sites, such as EBay Inc.

“If you trace what we’ve done last year and what we’re going to do this year, you will see, I think, a trajectory that is fundamentally different,” Balogh said in an interview.

Yahoo continues to improve its search engine, adding services such as Search Assist, Balogh says. That feature anticipates what users want to find by suggesting relevant terms.

SearchMonkey

Another project, SearchMonkey, allows developers to enhance search results. Balogh declined to comment on whether Yahoo will seek to work with Microsoft to challenge Google in the Web- search market.

“What Yahoo really needs is some structure,” said Karsten Weide, an analyst with research firm IDC in Framingham, Massachusetts. “All of this will take a few years to pay off.”

To get a sense of what’s on employees’ minds, Balogh holds monthly breakfasts with workers whose birthdays fall in that month.

Balogh showed he can pull off difficult tasks as chief technology officer of VeriSign Inc., the biggest manager of computers that direct Internet traffic, said Stratton Sclavos, the company’s former CEO. Under Balogh, the number of daily Web address requests handled by VeriSign increased to about 20 billion in 2007 from about 1 billion in 2000.

“Ari had led that entire program,” Sclavos said. “He had invented a way to handle about 20 times more requests at probably one-fifth the cost.”

Perfectionist

Kenneth Silva, who worked for Balogh for eight years and is now chief technology officer at VeriSign, said Balogh once kept his team up until 3 a.m. finishing a presentation. When the team thought the project was done, Balogh decided he still needed to move a line on a graph “a millimeter” over to the right.

“He’s not going to put the line on there if it’s not going to be done exactly the right way,” Silva said.

At Yahoo, Balogh faces a talent drain. Qi Lu, senior vice president of search and advertising technology, left Yahoo last year. He joined Microsoft in December as head of its online services unit. Stewart Butterfield and Caterina Fake, co- founders of the Flickr photo-sharing site, departed in June.

Balogh said he’s not having trouble finding people to work for Yahoo. He points to Shelton Shugar, an EBay executive who was hired to run the company’s cloud-computing operations in 2008.

“Talent leaves and talent comes on,” Balogh said. “It’s not hard to get people excited about the opportunities of working at Yahoo.”

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

Last Updated: April 21, 2009 16:04 EDT