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As Yahoo Compares Itself to TV, Content Acquisitions on the Way

Yahoo (s YHOO) CEO Carol Bartz trumpeted the comeback of display advertising on the company’s fourth-quarter call with analysts today by saying: “Frankly, our competition is television.” Yahoo’s display revenue grew 26 percent on a sequential basis, to $503 million, down just 1 percent from the same three-month period a year ago. Bartz said larger advertisers are now getting back in the mix, ready to spend significant money — often out of what used to be their TV budgets.

That “makes video really important,” said Bartz, adding that along with social features, Yahoo expects to integrate video across all of its properties this year. “Social and video should not exist in a silo,” she said. Bartz pointed to the success of Yahoo’s TV recap show “Primetime in No Time” (see NewTeeVee coverage) which saw a high of 12 million daily streams on one occasion in November — larger than the “24” season premiere on television, she pointed out. Bartz also highlighted a deal for more original content production with IAC’s (s iaci) new programming venture, Electus, led by Ben Silverman.

While few online video content companies have had the opportunity for exits post-YouTube, that might change in 2010. Bartz, who has said in the past she wants to acquire video companies, despite Yahoo’s rocky history with both video technology and original video creation, called 2010 a year of “acquisitions and investments to make Yahoo even stronger.” It would not be, she said, “about divestitures.”

A key area of acquisitions will be for companies that have audience, content and community, especially in a niche, said Bartz (other shopping categories are technology and new geographies). She didn’t name any names, but from my reporting on the video market I can think of plenty that fit that bill — say, Next New Networks, Worldwide Biggies or Howcast. Though web video companies generally get more creative than just display advertising, they help connect the dots for Yahoo to compete with television.

Bartz promised would-be acquisition targets that, unlike in the past (like with white-label video site Maven Networks, which cut off customers only a little over a year past being bought for $160 million), Yahoo is now committed to “post-deal accountability.” Meanwhile, Yahoo’s not the only acquirer in the hunt. AOL just paid $36.5 million for StudioNow and its community of video freelancers.

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11 Responses to “As Yahoo Compares Itself to TV, Content Acquisitions on the Way”

  1. Yahoo can earn higher CPM’s on video than any other ad inventory they offer. And video that is contextually relevant to an advertiser’s message fetches even higher CPM’s. AOL’s strategy to offer advertisers more video content and more involvement in the creation of that video is not lost on Yahoo. What Yahoo needs to avoid is replicating the Terry Semmel/ Lloyd Braun video strategy of bringing in high cost Hollywood productions and pure entertainment content. Most of Yahoo’s “channels” are by nature utility-based and will be best supported by non-fiction video content that adds value to consumers and in turn provides opportunities for advertisers. There is no reason they should not finally see themselves as competing with TV for advertisers.

  2. Quite a confusing story here. Compared to a year ago, when the dreaded recession was in full swing,, Yahoo is down 1 percent, and they seem to be proud about it! And then, in claiming that TV is their only competitor, have they given up on the more obvious ones? And btw, what does “TV is our competitor” mean given that TV manufacturers, by the dozen, are porting Yahoo widgets to their TVs?

  3. Yahoo is TV…blah blah blah…Carol might be trying to sell this but, is anybody buying? YouTube is the video on the internet. And, Hulu is the TV. With comcast bringing TV shows to internet; Yahoo! has little or no chance to succeed. And, given its history of acquisitions and lack of long term product vision – nobody in their right mind think they will succeed. Nobody goes to to socialize nor do they share links via yahoo mail as often as they share via twitter and facebook. Once a web stalwart, yahoo has become just another also run site with large number of people giving a glance – as it is evident from their falling engagement numbers.