TELECOM Digest OnLine - Sorted: Yahoo Shakeup Highlights Web Video Shift

Yahoo Shakeup Highlights Web Video Shift

Gary Gentile, AP (
Thu, 07 Dec 2006 22:01:11 -0600

By GARY GENTILE, AP Business Writer

The departure of television veteran Lloyd Braun from Yahoo Inc.
underscores a shift, or at least a major hiccup, by Internet companies
away from creating costly original content.

Braun, who once ran primetime programming for the Walt Disney Co.'s
ABC network, left Yahoo this week after his role was greatly
diminished in a companywide reorganization that placed his group into
a newly created division.

Yahoo's hiring of Braun to run the new Yahoo Media Group two years ago
sparked speculation that the online company was itching to become, in
effect, a TV network on the Web, producing its own shows to attract
eyeballs to its lucrative Internet advertising.

After all, Braun was responsible for ABC's nascent turnaround and the
genius behind its hit show "Lost." Analysts saw great symbolism in the
consolidation of Yahoo's far-flung media sites -- music, video,
finance and news -- into a new Santa Monica office that was once home
of fabled movie studio Metro-Goldwyn-Mayer.

But two years ago, no one foresaw the rise of sites such as YouTube
and MySpace, which became huge companies by aggregating user-generated
videos and creating communities where people could network. YouTube
was eventually bought by search giant Google Inc. for $1.76 billion,
while MySpace was snatched by News Corp. for $580 million.

Few people also foresaw that major media companies such as Disney, CBS
Corp. and Time Warner Inc. would begin selling TV episodes or
full-length films over Apple Computer Inc.'s iTunes store.

As YouTube and similar sites grew in popularity, Braun struggled to get
competing Yahoo divisions to think in terms of content rather than
technology, Braun recounted in an interview at his Santa Monica office
several weeks before his departure.

One major glitch that consumed more than a year, for instance, was the
lack of common software for producing and publishing content at the
various product units inside Yahoo. Incompatible technology made it
nearly impossible to design a template that could be easily shared by
the various sites.

Before redesigns of such services as Yahoo Music or Yahoo Games could
be launched, Braun's unit had to develop a common software platform, a
task now completed. Yahoo recently started to rollout redesigned sites
and introduced a new offering, Yahoo Food.

Braun also had to curtail ambitions to produce original shows for the
Web. Replicating the TV network model would be prohibitively
expensive, especially if such shows could only be viewed on a small
computer screen.

Yahoo did create several new video and other programs, including news
dispatches from war journalist Kevin Sites. The company also recently
launched a series of live music performances similar to those featured
on rival AOL's site.

But in a twist, one of its most popular shows, called "The Nine,"
features host Maria Sansone counting down nine notable user-generated
video clips found on other sites such as YouTube.

Yahoo isn't alone.

When Time Warner Inc.'s AOL started breaking down its walls of
exclusivity two years ago, the company cited its own video productions
of concerts and other events as reasons people would want to visit its
free, ad-supported sites. AOL even won a broadband Emmy for last
year's "Live 8" concert special.

Although AOL isn't abandoning those productions, its focus lately has
been on search. It wants to be the starting point for online video,
whether it's hosted at AOL or at a rival like YouTube. AOL also
started its own video-sharing service, UnCut Video, where users can
share clips they produce with camera phones and camcorders.

The rapidly changing Web landscape has left Yahoo playing catch up, a
situation this week's reorganization is designed to address.

"Frankly I'm surprised it took Yahoo so long to make this decision,"
said Dmitry Shapiro, chief executive of video startup Veoh Networks
Inc. "I think it's been known for at least a year, with the success
of YouTube and hundreds of media aggregator players like Veoh that are
jumping into the game, that this is the way it should be done. But
large companies move slowly."

Veoh wants to distribute user-generated and Hollywood content, but has
no plans to create its own shows.

Nonetheless, original content created for distribution over high-speed
Internet connections shouldn't be dismissed just yet, said former
Disney chief executive Michael Eisner, who now invests in
media-related startup companies such as Veoh.

"The production of original content for broadband is coming and will
be significant and important just like it was significant and
important for cable," Eisner said.

Eisner said traditional media and online companies are in a
transitional period where Hollywood-generated programs, TV shows and
films are competing for attention with user-generated material. Makers
of original Web content aren't wrong, he said, but may be hurt by
pushing it before consumers are ready.

"To take a position that it's all going to move to user-generated and
be this anarchy and democracy is wrong," Eisner said. "To take the
point of view that it's all going to be distribution of ancillary
product from the studios and others is wrong. And to take the position
that it's all going to be original product is wrong.

"It's all three and it's all a matter of being too early or too late."

Copyright 2006 The Associated Press.

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