There is no area of the Internet that’s more competitive right now than video, in the race for both advertising dollars and viewers. That’s why Yahoo is planning a major revamp of its video efforts before the end of the year.

The No. 2 Web-search company said it plans to turn Yahoo Video into a hub that draws video from all across the Yahoo network of sites, including news, music and TV destinations.

Currently, Yahoo Video is primarily dedicated to user-generated material, sprinkled with some clips from Yahoo’s other sites.

Relaunching Yahoo Video as a one-stop video shop is part of the company’s plan to capture online consumers whose hunger for clips is turning the Web into a video medium.

"What we need to do is surface all the content in Yahoo in a much richer experience," said Mike Folgner, general manager for video at Yahoo.

Yahoo executives declined to disclose how much video advertising generates for the company. Market research firm eMarketer said the growth rate for online video ad spending—mdash;already at 89 percent this year—will remain near or above 40 percent through 2011. At that point, online video ad spending is projected to be $4.3 billion.

"In the near term, video ad revenue is a small opportunity for a company of Yahoo’s size," said Will Richmond, president of Internet video research firm Broadband Directions. "Given ’06 revenues of $6.4 billion, video ads are likely to remain less than 10 percent of Yahoo’s overall revenues for at least the next two to three years. Over time, as TV ad dollars shift and broadband video usage soars, it’s a huge opportunity for Yahoo and others."

Creating an all-in-one portal will make it easier to pitch Yahoo to advertisers, said Rebecca Paoletti, director of video strategy at Yahoo. Marketers will be able to buy access to a demographic across Yahoo and all its video content, rather than simply choosing particular content categories.

Each of Yahoo’s category sites still will house video that complement their content.

Despite the siloed approach the company has relied on so far, video has been a bright spot in recent months for Yahoo, which has struggled to keep pace with Google in search and revenues.

Those challenges at Yahoo, the most-visited group of sites on the Web, led to the June replacement of CEO Terry Semel with Yahoo co-founder Jerry Yang.

In June, Yahoo Video was the fourth most-visited video site on the Internet, luring 15.5 million unique users, behind YouTube with 51.4 million, Google Video with 17.8 million and AOL Video with 15.7 million, according to Nielsen//NetRatings.

That compares favorably to a year ago, when Yahoo Video finished with 3.1 million unique users in June 2006.

Yahoo also thinks it can do better.

"There hasn’t really been a hub," said Mr. Folgner. "What we are going to do is build that hub for video, aggregate that content, put a great user experience on it and put community elements, like mail and Jumpcut," Yahoo’s editing software.

Yahoo also boasts content relationships with partners including CNN, ABC News, Reuters, Showtime, NBC and most music labels.

Mr. Folgner believes the new, centralized approach will lead to more video use. In May, Americans viewed more than 8.3 billion video streams online, with Google and its sites (primarily YouTube) claiming 21.5 percent of that traffic. Fox Interactive Media ranked second with 8.1 percent, while Yahoo’s sites finished third, garnering 4.6 percent of streams, according to Web research firm comScore.

Next year more than 50 percent of the U.S. population, or 155 million people, will watch Internet video, eMarketer said.

With YouTube so far ahead as a video destination, catch-up may not be a feasible goal. But the revamp is not about competing with YouTube, Ms. Paoletti said.

She acknowledged that YouTube is highly trafficked in part because it’s a one-stop shop for videos. Yahoo is borrowing a bit of that approach for its facelift, and the new hub will allow for search and browsing by content and category.

Yahoo won’t, however, bank on the user-generated content that has made YouTube so popular. Most brand advertisers don’t want to sponsor user-generated content because the content can be risque and uneven in quality, she said.

While Yahoo Video lets users upload their own videos, the majority of clips come from partners or from more refined user-generated clips. For instance, Yahoo recently sponsored a contest inviting users to create trailers for the summer movie "Transformers." It also hosted a competition for a user-generated Doritos commercial for the Super Bowl. Advertisers are more comfortable sponsoring that type of content, Ms. Paoletti said.

Mr. Folgner said Yahoo also will tweak its video search capabilities so users can search for clips both within Yahoo and across the Web.

The changes are overdue, Mr. Richmond said.

"The strategy is smart and is what Yahoo should have been doing for a while," he said. "They have underperformed their potential by splintering their video over many disparate video player experiences."