Lagging in popularity
Yahoo has operated a video site since late 2004, but a lack of innovation has caused it to lag in popularity behind the YouTube juggernaut, which drew some 38 million visitors in April -- a 1,200% increase over six months -- according to comScore MediaMetrix.
Yahoo is using its contacts in news and entertainment media to complement the site's amateur offerings, while avoiding the licensing issues that sites like YouTube have faced. Users of the service can view "channels" from ABC News, the Discovery Channel and CNN, among others, the content of which will include existing pre-roll ads.
Monetizing social media sites
Yahoo Video also enhances the company's efforts to cultivate information-sharing communities such as the photo site Flickr and Yahoo Answers. And while Yahoo has typically held off on monetizing these properties -- partly to give them a genuine air, and partly because selling ads next to such content isn't easy -- Yahoo is becoming more forthright in its desire to profit from social media. Just this week, for example, Flickr said it will soon carry branding from camera manufacturer Nikon alongside pictures taken with a Nikon camera.
"The Flickr, Nikon partnership is the perfect example of a larger effort of coming up with creative means of monetizing social media," said Jason Zajac, general manager of social media at Yahoo. "That's an initiative coming from the highest level [of Yahoo management], and involving internal discussions involving sales people, creative people and the communities themselves."
Analysts getting a first look at Yahoo Video today said the site's success will depend on Yahoo's ability to please the disparate interests of advertisers and users. "It's too early to tell whether Yahoo has struck the right balance between commercial and community interests," said Andrew Frank, Gartner Research analyst.
Google, which recently re-launched its own video service, is charging users for premium content from CBS and other media companies. Yahoo has no present plans to charge for videos, even those from media channels.