Yahoo Looks to Build Upon Its Strengths

Feb 5, 2007  •  Post A Comment

Yahoo aimed to repair its beleaguered image last week when it trotted out the leading executives from its media group for reporters at its Sunnyvale, Calif., headquarters.

The executives’ message to the more than 20 journalists assembled: With its breadth and reach Yahoo still can and will aggregate like nobody else.

This year, Yahoo plans to step back a bit from user-generated video and video search. It will instead focus resources on developing Web sites dedicated to 100 high-profile entertainment brands to revamp its Yahoo Video site with more programmed and professionally produced content, the executives said. TV shows “Lost” and “The Office” are among the properties earmarked for dedicated sites.

The company also will pepper its entire Yahoo network of sites such as Yahoo Food, Yahoo Tech and Yahoo TV with video rather than home in on Yahoo Video as the portal’s primary online video destination.

Yahoo is looking for a rudder for its ship. The revamped strategy unveiled last week follows a tumultuous end to 2006.

Fresh off the exodus of former Yahoo media chief Lloyd Braun in November and his top lieutenant David Katz, the online giant is desperate to eke out an identity in a field where it is constantly overshadowed by Google, YouTube and MySpace.

Yahoo in fact appears to be ceding victory to YouTube as the go-to site for Web video, by opting instead to integrate video more deeply across its sites, said Greg Sterling, principal with Sterling Market Intelligence.

“There is a retrenchment going on in the wake of the Google acquisition of YouTube. They are reevaluating things,” Mr. Sterling said.

Yahoo struggled to live up to the expectations set when Mr. Braun swept in from ABC two years ago, but failed during his term to ignite a wave of interest in watching originally produced material on Yahoo. Now, the company plans to retool its entertainment strategy by playing to its strengths, breadth and reach. For starters, the company will focus on revamping Yahoo Video.

“We can do a lot better,” said Vince Broady, head of entertainment, games and youth at Yahoo, during the press luncheon last week.

Later this year, Yahoo will rejigger Yahoo Video so that it feels more “programmed” as Yahoo looks to reach the 13- to 34-year-old audience it covets.

“As a strategy, we want to provide premium content,” Mr. Broady said.

Yahoo Video will migrate away from serving as a search destination for video and a clearinghouse for popular clips. Instead, Yahoo Video will feature more professional or semi-professional content, he said.

Though Yahoo still offers user-generated videos, the novelty has worn off some for that genre, Mr. Broady said.

“It’s starting to happen. Usage will level off,” he said.

Yahoo’s strategy of making video more pervasive across its sites is a must, Mr. Sterling said.

“They sort of have to do that because at this point, they lost the game as a destination,” he said. “YouTube has won as the video destination and that doesn’t preclude Yahoo from being successful with video. But I think it needs to finds a different approach for the time being,” he said.

If YouTube carries through on its plans to introduce ads in front of its videos, Yahoo could regain some competitive footing. A recent Harris Interactive study found that 73 percent of frequent YouTube users say they would visit the site less if it started including short video ads before each clip. Yahoo’s Mr. Broady did not concede that Yahoo is taking a backseat to YouTube.

“I don’t view that we have lost. We are not giving up on anything,” he said.

Yahoo has pulled back on original content after that Braun-led strategy floundered.

Original content was always the “salt and pepper” and will remain that, Mr. Broady said. Even Yahoo’s original shows that have performed well, such as “The Nine,” are based on aggregating other content. The Nine recaps popular Web videos.

Yahoo will continue to build on other brands, especially through its new “Brand Universe” program that’s designed to better link entertainment content across Yahoo’s sites and services.

Under this so-called “Brand Universe” strategy, Yahoo will develop sites dedicated to 100 high-profile entertainment brands this year, including TV shows “Lost” and “The Office,” as well as video games “Halo” and “The Sims,” and the movie franchise “Harry Potter.”

Missing Link

This new strategy should marry Yahoo content that previously existed as separate silos, Mr. Broady said.

“You can’t get from the Flickr photos with Jack Bauer tags to the `24′ page on Yahoo TV. You can’t get to the groups on `24.’ We don’t connect the dots for users around these brands,” he said. “Brand Universe is really a concept designed to fix that problem.”

In addition to linking its assets across Yahoo’s network of sites, Yahoo will report back to its entertainment partners on the traffic, activity and reach of those brands, he said.

Yahoo has tapped the 100 brands for the Brand Universe club based on critical mass of audience, passion of audience and reach against the 13 to 34 demo that Yahoo is targeting. Brands will primarily be movies, TV shows, video games and celebrities with a strong entertainment value.

Mr. Broady expects to lure additional ad dollars and he’s positioning Brand Universe as a premium advertising vehicle.

“The brands we choose all drive tremendous amounts of revenue,” he said. “We can create an ongoing environment on Yahoo that has traffic and sustains over time and can create new revenue opportunities over time.”

That includes the Yahoo News category. Yahoo News reached 34 million unique visitors per month and last year the company inked deals to layer more video into Yahoo News from the CBS-owned stations, ABC News, CBS’s 60 Minutes and others, said Scott Moore, head of news and information for Yahoo Media Group.

Yahoo News grew from serving 3 million video streams per month in October 2005 to about 60 million video streams per month today, he said.

Yahoo News ad revenues grew 50 percent last year over the year before. Mr. Moore said he expects revenues to grow 50 percent or more this year for Yahoo News.