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Yahoo Has a Crowd, Wants a Voice

One company dominates online news, sports and finance. It has more visitors to its news site than the runner-up in the category, CNN, more in sports than ESPN and more in finance than Dow Jones, owner of The Wall Street Journal.

That online media colossus is Yahoo , and it is in distress.

Despite a huge audience of 686 million users and resources like high-tech film studios and talent-filled newsrooms, Yahoo’s future is in doubt. Potential buyers are circling to pick up parts after the messy firing last month of Carol A. Bartz, Yahoo’s chief executive.

Yahoo!
Yahoo!

Yahoo’s portfolio of media sites is the company’s crown jewel and potentially its savior. The company announced on Monday that it had partnered with Walt Disney’s ABC unit to showcase articles and videos from ABC News, and to create a co-branded Web site for “Good Morning America.”

But the Yahoo sites also suffer from symptoms infecting the rest of the company: shifting priorities and a shortage of innovation. Yahoo has another problem too: a lack of respect.

“If we ask somebody on the street, ‘What’s the top news brand?’ Would they say Yahoo news?” said Mickie Rosen, the senior vice president who oversees Yahoo’s media properties. “The honest answer is they probably wouldn’t.”

Yahoo built its huge audience largely by aggregating news from other sources. The Associated Press, US Weekly, Politico and The New York Times are just some of the partners that feed it content around the clock. Now Yahoo executives are pushing for original reporting, covering special events like the Emmys and creating exclusive online video programs. This month, Yahoo will exclusively video-stream a charity concert that includes performances by Lady Gaga, Usher and Bono. They say they have made it a priority to hire reporters and editors who write and break news online.

Ms. Rosen, a former executive with Fox Interactive Media and Disney online who joined Yahoo 10 months ago, said that Yahoo had not done a good job of creating “a voice” that made people take notice. Fixing that falls in large part to Jai Singh, Yahoo’s editor in chief, another newcomer. He helped build a newsroom for Arianna Huffington as a top editor at The Huffington Post just as he built the newsroom for the technology news site CNet.

“Yahoo is going through a transformation in every respect,” Mr. Singh said. “We are trying to get our digital media chops. But transformations are not a snap of the finger.”

Yahoo’s home-grown content should be highlighted more on its front page, to lift its visibility and traffic, Mr. Singh said. Linking to articles in other sections should also be routine. To encourage cooperation, Mr. Singh instituted weekly meetings for editors to talk about coming coverage and special projects. Before, individual sections often failed to talk to one another, a common complaint across the company.

To entice users to click on more articles, Yahoo is increasingly trying to personalize its site so that the topics that appear are more in tune with the tastes of individual users. Yahoo’s home page already shows more than 13 million variations daily.

Yahoo is also adopting some ideas from social networking. A new service introduced along with Facebook’s announcement of new features allows users to see and share Yahoo news articles that they and their Facebook friends have read.

Yahoo’s shortcomings in media can be traced back to top management’s indecision over whether the company should be a media or technology company, said Larry Kramer, the founder of the business news site MarketWatch and the former president of CBS Digital. The problem confronted Terry S. Semel, a former movie executive who served as chief executive from 2001 to 2007, as well as Ms. Bartz, who used to run Autodesk, a Silicon Valley software company. Yahoo has traditionally straddled both worlds and fallen short in both of them.

Aggregating from other sources made it difficult to develop innovative ways to deliver that content through smartphones and tablet computers, Mr. Kramer said. It fumbled Livestand, an iPad app that combines articles from various publications into a single and slickly designed digital magazine. Yahoo gave a splashy preview of the app at a conference this year and promised it would be introduced by the end of June, but the app is now expected by the end of the fall. The category is now crowded with competition: Zite from CNN, Editions from AOL and the apps Flipboard, Pulse, Taptu, Flud, News.me and SkyGrid.

“They could be the pre-eminent news organization in the world because they have so many customers,” Mr. Kramer said. “They have what every newspaper would kill for.”

"Stabilize the ship."

It does have the audience. In August, Yahoo led the general news category with 81.2 million unique visitors in the United States, according to comScore. CNN, the second-place site, had 75.3 million visitors during the same period while The Huffington Post Media Group had 56.8 million. Nine of Yahoo’s media sites lead their category in traffic.

But Yahoo’s size has failed to translate into revenue growth. Revenue from display ads, the online billboards that appear when a Yahoo Web page is called up on a computer screen, were essentially flat in the first six months of the year, at $1 billion, while the online ad industry grew at about 27 percent.

Yahoo’s problem is that Internet users are spending a bigger portion of their time with Yahoo’s competitors. The percentage of time users spend on Yahoo is down a third from its high three years ago, while the share of the time spent on Facebook has catapulted more than sixfold over the same period, according to comScore.

So how does Yahoo get people to stick around longer? It thinks Yahoo Sports is the model. Over the last few years, sports, more than any other Yahoo media site, bet big on original coverage by hiring reporters and writing original articles.

The investments have led to several prominent scoops. The latest was a yearlong investigation, published in August, that showed widespread violations of N.C.A.A. rules by the University of Miami’s football team. The article received 38 times as many page views as a typical sports article, according to Yahoo.

“There’s nothing like sitting a hotel room, turning on ESPN and seeing on a ticker that Yahoo Sports breaks a story,” Ms. Rosen said. Such citations by other media outlets help to lift Yahoo’s reputation in news, she said.

Yahoo Sports also produces a number of online video shows, including game highlights and Fantasy Football Live.

Yahoo executives still say they believe that professionally produced video appeals to advertisers more than the skating dogs and off-tune singers on YouTube. Partners like ABC also provide shows, keeping costs down, according to Ross Levinsohn, Yahoo’s executive vice president for the Americas. “We aren’t sitting here spending hundreds of millions of dollars creating a new network,” he said.

Indeed, Yahoo now films around 26 shows a month, many of which attract large audiences, at least by Internet standards. Yahoo said that 26 million people watched its original programming in August, more than watched Hulu, the video site backed by several Hollywood studios.

They want to produce even more. Seven new series will have their premieres this week, including one about relationships, two cooking programs and another in which men get advice about making memorable wedding proposals.

Yahoo also tried to acquire Hulu earlier this year, according to a source familiar with the matter who was not authorized to speak on the record. It is unclear whether Yahoo’s board plans to press ahead amid the distraction of a strategic review of its business and a potential sale of all or parts of the company.

The possibility of its own buyout or break-up casts a shadow over Yahoo, though all the executives interviewed said that it was business as usual inside the company. Scott Kessler, an analyst at Standard & Poor’s Capital IQ, said that uncertainty was the norm inside Yahoo, which in recent years has had a succession of leadership changes, departures of top executives and the battle to ward off a takeover by Microsoft.

“First they need to stabilize the ship,” Mr. Kessler said, “and then they need to turn it in the right direction.”

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