Advertisers slow to warm to Yahoo's new news

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It's been a year since Yahoo CEO Terry Semel hired Lloyd Braun, former head of ABC Entertainment Television Group, to bring his Hollywood sensibilities to the portal and create what that new head of media said would be the Web's own "I Love Lucy" moment. So far, it is a moment waiting to happen.

As leader of the Yahoo media group, Mr. Braun has made a stab at that promise starting with original content on Yahoo News, with dispatches from a foreign-correspondent-cum-blogger; an adventure-travel tab; content from the snarky Gawker blog group and the political HuffingtonPost.com; and well-known financial columnists writing original content on Yahoo Finance. Yahoo has hired a managing editor and other news staffers to build out its own news service in coming months.

But, in those two areas Yahoo is holding out as the next generation of the Web-travel and foreign-correspondent offerings-there are precious few ads so far and not exactly tons of traffic. And the most-touted symbol of Yahoo's next-generation Web-news dispatches from "Kevin Sites From the Hot Zone"-a multimedia presentation of conditions in regions torn by war and poverty, may actually discourage advertisers with its content.

Still waiting for `Lucy'

Hot Zone, which launched in September, has just under 1 million users-barely high enough for Nielsen/NetRatings to count. "Richard Bangs' Adventures," which rolled out in late October, does not have high enough traffic figures for the measurement service to count. There are a few brands purchasing ads on the new content so far, including Casio, Travelocity, Swiss International Airlines, China Airlines and the Thailand Tourism Board on the travel section; TD Waterhouse, Ameriprise, State Farm, Bank of America, T Rowe Price and Vanguard in the financial-news area; and Warner Bros. advertising "Syriana," a film about intrigue in the international oil business on the Hot Zone. Ads on Gawker and Huffington are run of site.

Admitting that the "Lucy" moment has still to happen, Scott Moore, VP- operations at Yahoo media group, said "it's really early days-we have to see what catches fire."

He pointed to what he called the innovative nature of the Sites and Bangs content. Mr. Sites' dispatches have a gritty tone, with reports on things like a Kurdish museum graphically demonstrating Saddam Hussein's atrocities. Mr. Bangs' pieces are more optimistic, like the piece about the Sea Gypsies of the Andaman Islands who survived the tsunami because their leader had a dream predicting the disaster, and moved his people to higher ground.

Yahoo has revenue the size of offline media companies-$2.25 billion in 2004-about the same as that of Walt Disney Co. The portal's strategy is to become the leader among media companies in the digital age and the Web-exclusive news content is the first step in that plan.

Buyers and analysts agreed the content is innovative. "It delivers what the Web is supposed to-an in-the-minute, unedited type of feel," said Sarah Kim, VP-media, Avenue A/ Razorfish. Buyers also praise the way the Casio digital camera is integrated in content as Mr. Bangs uses it on location, and how the Travelocity Gnome shows up as one of the photos framed within his dispatches.

But the Hot Zone coverage may be a victim of its own success in seeking out stories of personal suffering in places like Iraq. "You really can't do news without upsetting advertisers," said Barry Parr, media analyst, Jupiter Research.

Because it is a film about current events in the Middle East, "Syriana" is a good fit for Mr. Sites' content. Don Buckley, senior VP-interactive marketing, movies at Warner Bros., said "the advertising suited the environment." But he couldn't think of any other film that would fit there.

"This content is not for the faint of heart," Yahoo's Mr. Moore said.

Internet insiders said Yahoo News' 25 million visitors a month give it the elbow room to experiment, even if some areas like Mr. Sites' dispatches can't be readily monetized. "If Sites gets a big following because it's the real deal because it's not scrubbed or cleaned up, then people are going to have an affinity with the Yahoo brand," said Jeff Marshall, VP-managing director, Starcom IP.

But whether or not it is strong enough to give Yahoo a news imprimatur has yet to be seen.

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