April 23, 2001 3:15 PM PDT

Now showing: Yahoo Broadcast

Yahoo introduced Monday a new version of Yahoo Broadcast, the Web portal's video and multimedia streaming service, as it explores ways to expand its business.

The latest incarnation of Yahoo Broadcast comes as the Web giant attempts to branch out into different types of advertising. So far, most of its ad dollars grow from banners within its Web pages. The new Yahoo Broadcast will sell ads similar to traditional styles found on television or radio.

Robert Hertzberg, an analyst at Jupiter Media Metrix, said the move is crucial for the Internet bellwether, which has been hit by the market downturn like many other dot-coms that rely on advertising revenues.

"Yahoo desperately needs to diversify its business model and revenue streams," he said.

Monday's announcement underscores Yahoo's recent push to develop new businesses in response to a deteriorating online ad market and the economic downturn. Since the beginning of the year, the company has twice slashed its revenue projections because of the ebbing flow of advertising dollars and the souring stock market.

A few weeks ago, Yahoo struck a deal with Duet, an online music subscription joint venture between Vivendi Universal's Universal Music Group and Sony Music Entertainment. The Web portal has also added for-fee services such as Yahoo by Phone, which reads e-mail and other information to people who call an 800 number.

On Yahoo Broadcast, the company will sell 30- or 60-second spots inserted into video or radio feeds, similar to those on television or radio. Viewers will be able to click on the advertisements or related links to find out more about products.

Yahoo has signed several video content companies to the site, including ABCNews.com, Accuweather, CourtTV.com, The Sporting News and Travelocity.com. These agreements will fill in gaps between videos that can be viewed on the service.

The new Yahoo Broadcast opens as a separate window with three sections. One section streams video using Microsoft Window Media as its default software. The window to the right of the media player serves information during the video broadcast. A general Web browser site sits below, letting people type in Web addresses or browse programming links offered by Yahoo.

Up to now, Yahoo Broadcast has largely remained in the shadows. Yahoo acquired streaming media aggregator Broadcast.com in 1999 for $5 billion in stock, but questions persisted over the deal's success. Much of Broadcast.com's video and audio streams were dispersed through Yahoo, such as onto its sports and entertainment areas.

The Yahoo Broadcast division also sold technology for companies to create their own internal Webcasts, which was the core money machine for Broadcast.com before the acquisition. That technology laid the groundwork for the company's own FinanceVision and ShoppingVision services, streaming video services that produce editorial content. Much of the layout and design of Yahoo Broadcast mirrors that of FinanceVision.

Looking ahead, Yahoo Broadcast could serve as a critical element in the company's attempt to introduce more "premium" services throughout its network. Yahoo executives have recently stated their intention to offer highly sought-after content for which they could charge people on a periodic basis.

"In the longer term it could be anything from pay-per-view sports or filmed entertainment," said Jeffrey Fieler, an equity analyst at Bear Stearns.

The business changes come as the company undergoes a frantic rethinking of its future. Last week, Yahoo appointed longtime Warner Bros. co-CEO Terry Semel as Yahoo's chief executive and vice chairman, replacing longtime CEO Tim Koogle, who is temporarily continuing as chairman. Koogle will eventually step down from his chairman role but remain a member of Yahoo's board of directors.

Analysts do not expect Semel to play a leading role in Yahoo Broadcast--a job that falls under Ellen Siminoff, once the head of business development but now the senior vice president of entertainment and small business. For now, most of Semel's time will be spent turning around the company.

"Yahoo Broadcast is coincidental with the fact that Semel's coming in," Jupiter Media Metrix's Hertzberg said. "I think he'll have more fundamental challenges facing him."

 

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