Yahoo plus ABC: Big, important — and doomed

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Most of the recent attention aimed at Yahoo has been focused on the upheaval at the former web colossus: the moribund advertising sales, the sudden departure of its CEO Carol Bartz, the rumors of a tie-up with fellow faded web giant AOL. But on Monday, the company tried to get a little positive mojo going with the announcement of a partnership with the broadcast network ABC, which will see Yahoo News and ABC News combine their assets. Although it isn’t being described as a merger, it might as well be one — but is it going to work any online magic for either entity? It’s difficult to see how.

The partnership was announced, fittingly enough, on ABC’s morning show “Good Morning America,” where a news executive described it as a “game changer” for the network. And there’s no question that the merger-that-isn’t-a-merger has some fairly big numbers behind it: Yahoo News is the web’s number one news portal, with about 80 million unique visitors a month — just ahead of CNN, according to a report in the New York Times. The website for ABC News is much smaller, drawing only about 25 million visitors in an average month.

The partnership includes something for either side: ABC, for example, will be producing web shows for Yahoo, including ones that feature personalities like former White House spokesman George Stephanopolous, foreign correspondent Christiane Amanpour and Nightline anchor Bill Weir. And Yahoo will be powering a new Good Morning America website — although ABC will have editorial control — and will also presumably be pushing those 80 million users towards various ABC properties to try and get the network’s ranking up as an online destination.

Is this a game changer? Not even close

But does any of this qualify as a “game changer,” or what Stephanopolous called “the future of news?” Not really. For one thing, as the New York Times story noted, the network has had a partnership with Yahoo that includes video sharing for some time now — since at least 2005. How is this any different? That’s not clear, except for the new Good Morning America website and the three custom shows that ABC has agreed to produce. But is it really a “game changer” that a news network and a large web portal would hook up to try and scratch each other’s backs? No.

John Paton, the new CEO of newspaper chain Media News Group, said on Twitter that such a deal is important because it combines two large properties into one massive news entity, and that this has implications for advertising and “reach,” and he is undoubtedly right about that: the two put together will have an audience of about 100 million, according to the news release announcing the partnership, and that is a sizable batch of eyeballs to serve ads towards.

But is this the “future of news?” Not even close. If anything, in fact, it is the past of news, which explains why anyone reading about this deal could be forgiven for feeling like they’ve been transported back to 2004 (or even further back than that, as noted by Peter Kafka of All Things Digital). This is a “portal” strategy, plain and simple — the same strategy that Yahoo has been pursuing for the past decade or so, which involves amassing huge numbers of eyeballs and then trying to monetize them through banner ads and other ubiquitous forms of advertising. And how is that working out? Not so well, it seems.

More eyeballs won’t solve Yahoo’s problems

Mass-market advertising, particularly online, is a losing battle — consisting of accumulating more and more viewers who are worth less and less all the time. TV audiences may still be relatively valuable (although even that game is changing rapidly) but the explosion of web content means that standard news-related webpages are less than a dime a dozen; in fact, they are close to being a dime a thousand. Do some advertisers still want these large audiences? Sure they do. But they are willing to pay less and less for them, and that is the biggest issue for Yahoo and its fellow former portals like AOL.

Trying to solve Yahoo’s problems by throwing more eyeballs at them is like trying to save a drowning man by pouring him a drink. What advertisers increasingly want is targeted audiences, and they are willing to pay for them. That’s part of the reason why more and more advertisers are working with Facebook and Twitter as an alternative to “mass” media outlets. Is a deal with ABC really going to help Yahoo get more focused on valuable niches or target its content better? It’s hard to see how. Yahoo has been down the “custom online TV show” route before, during the less-than-illustrious tenure of former CEO Terry Semel, and it eventually backed away from that approach because it simply wasn’t worth it.

As former PaidContent founder Rafat Ali put it, these deals keep getting announced every once in a while, and then they sink beneath the waves and no one ever hears from them again — and that’s because they will do little or nothing to change the fortunes of either party in a material way. They are full of sound and fury, but signify nothing.

Post and thumbnail photos courtesy of Flickr users Yodel Anecdotal and Denise Chan

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