Yahoo Through The Ages: Product Vs Media

From Jan 1 2006

Yahoo shapes up online video project / Reality series pilot to be broadcast on the Internet

Terry Semel, the former movie studio chief who now leads Yahoo Inc., is back in show business. His Web portal has filmed a pilot for a reality series called “Wow House” that will be broadcast online within the next few months. The program, which follows two families as they refurbish their homes with $10,000 in new electronics, is the most concrete example yet of Yahoo‘s Hollywood ambitions. It’s just an early step, analysts said, in Yahoo‘s ultimate goal: creating television of the future. Semel is betting that online video’s popularity is about to take off. Internet users would flock to Yahoo to watch shows on their computers or other Internet connected devices, creating a potentially lucrative opportunity to sell advertising.
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From July 16th 2012

Marc Andreessen On Marissa Mayer Joining Yahoo: ‘It’s Great For The Valley’

Contrasting Mayer with Yahoo’s interim CEO Ross Levinsohn (who was seen as another leading contender), Andreessen said this is “a big statement on Yahoo’s part.” He was careful to praise Levinsohn, but Andreessen said Levinsohn would have been more of sales- or content-centric CEO, whereas Mayer will be a product-centric CEO— and having another product CEO is “great for the valley.” In fact, he noted that Yahoo’s press release says the appointment “signals a renewed focus on product innovation.”

 

Marc Andreessen Tells Us What He Thinks Of New Yahoo CEO Marissa Mayer

Business Insider: What do you think?

It’s a huge statement on the part of the board that they want the company to be product-led. I say that because they had a great CEO if they wanted to be media-led. It’s a huge double down on product.

Do you think focusing on tech products is the right strategy for Yahoo?

If you asked me a week ago, I would have said probably not, but I didn’t think they could get someone like Marissa.

Why are you surprised they got her?

She was not known to be available and when companies get into these dire straits, it’s hard to get someone of this caliber. Even Steve Jobs didn’t want to go Apple.

So you think Mayer is a great hire. Why? 

Three reasons:

  • She’s a proven manager at scale. She knows how to run these companies at scale. There aren’t that many product managers in our industry who can manage at scale.
  • She’s a proven product leader.
  • She knows the Internet inside out.

What’d you think of interim CEO Ross Levinsohn? Lots of others thought he should have gotten the job.

I don’t think they passed on Ross, I think they decided on the product profile. I think it was a strategy decision not a person decision. If they wanted a content strategy they had a great guy in the job. He would have been great.

He’s in the catbird seat right now. They’re either going to pay him a lot of money to stay there or he’s immediately the number one candidate for any other job.

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From Mar 2013

Yahoo today issued its annual 10-K reportto the Securities And Exchange Commission. These kinds of forms have a lot of boilerplate language that is reused again and again — often, companies just change the relevant revenue numbers and leave everything else the same for years (come to think of it, isn’t that the excuse former YahooCEO Scott Thompson made for the errors in his official bio?)

But with this latest 10-K, its first with Marissa Mayer at the helm as CEOYahoo switched up its language in an interesting way. Yahoo is now labeling itself first and foremost as a “global technology company,” in the place where it used to call itself a “digital media company.”

Here is the first sentence of today’s 10-K (bold type added by TechCrunch for emphasis):

Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), is a global technology company focused on making the world’s daily habits inspiring and entertaining.”

And here is the first sentence of the 10-K Yahoo filed last year and the two years prior, respectively (again, bold type added for emphasis):

Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), is a premier digital media company.”

Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), is a premier digital media company that delivers personalized digital content and experiences, across devices and around the globe, to vast audiences.”

Yahoo! Inc., together with its consolidated subsidiaries (‘Yahoo!,’ the ‘Company,’ ‘we,’ or ‘us’), attracts hundreds of millions of users every month through its innovative technology and engaging content and services, making it one of the most trafficked Internet destinations and a world class online media company.”

It seems that Mayer, a bona fide engineer by training, is working to put an end to that long-running debate as to whetherYahoo is primarily a media firm or a tech firm — no more quibbling, technology is the top priority. Like other corporate moves since Mayer has taken over as Yahoo’s CEO, it’s a small change, but it’s a symbolic and important one.

 

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From May 20th 2013

 

Yahoo can’t decide if it’s a media company or a tech company

Yahoo‘s acquisition of Tumblr for $1.1 billion is a big gamble by Marissa Mayer, the company’s recently-hired CEO. The microblogging site is a valuable asset, but media accounts of Mayer‘s thinking suggest she hasn’t come to terms withYahoo‘s fundamental dysfunction: that it can’t decide whether it’s a media company or a technology company.

Technology investor Paul Graham has written about his experience at Yahoo when the firm acquired his start-up in 1998. “One of the weirdest things about Yahoo when I went to work there was the way they insisted on calling themselves a media company,” he wrote. “The worst consequence of trying to be a media company was that they didn’t take programming seriously enough.”

The most successful software companies, including Microsoft (in its prime), Google and Facebook, have focused obsessively on recruiting the best programmers. In contrast, even in its early days, Yahoo viewed content as a generic commodity to be packaged and resold to advertisers.

That ambivalent attitude toward technology was one reason Yahoo lost its dominance of the search market early in the last decade. And it explains why Yahoo failed to capitalize on the early popularity of Flickr and del.icio.us, two sites Yahooacquired in 2005 and has done little to improve since then. In all of these cases, Yahoo squandered an early lead as more nimble, programmer-focused companies built superior products.

“Most technology companies eventually get taken over by suits and middle managers,” Graham wrote. “At Yahoo it felt as if they’d deliberately accelerated this process. The company felt prematurely old.”

Hiring Mayer away from Google was supposed to rejuvenate the firm. Yahoo‘s board hoped Mayer, a computer programmer who had been immersed in Google’s hacker-centric culture for more than a decade, could bring some of Google’s cultural strengths with her to Sunnyvale.

But media reports of Mayer‘s thinking about the Tumblr acquisition suggest that Yahoo‘s culture may be rubbing off onMayer more than vice versa. According to AllThingsD, which broke the news of the transaction over the weekend, Mayerbecame interested in Tumblr because it was “just the kind of property that Yahoo needed to make it both ‘cool’ and relevant to new consumers.”

This is media company thinking. Media companies build brands by associating themselves with hot cultural trends. Because these trends are fickle, media companies can’t do much more than observe which way the crowd is moving and race to get in front of it.

In contrast, technology firms build strong brands by creating technology that is objectively superior to other products on the market — for everyone. Google didn’t become the dominant search engine through strategic partnerships or savvy marketing. It did it by having better search results than its competitors. And while younger users switched to Google more quickly, Google has been gradually winning older users for its search engine as well.

Tumblr’s current “cool” factor is a reflection of the fact that it’s the best product on the market for a certain style of blogging. If it can maintain that technological edge, it’s likely to continue growing. If it stagnates technologically, then its popularity will atrophy just like Flickr and del.icio.us.

Mayer says she will give founder David Karp autonomy to continue operating Tumblr as an independent entity. That’s probably wise, as it will avoid smothering the firm in Yahoo‘s bureaucratic culture. If Yahoo simply provides Karp with resources and stays out of his way, the acquisition could prove a savvy investment.

But that may be easier said than done. Part of Tumblr’s charm is its minimalist design and simple user interface. Yet part of Mayer‘s argument for the acquisition is that Tumblr can benefit from integration into Yahoo‘s personalization, search and advertising platforms. But it’s not clear that these changes will improve the experience for Tumblr users. And more importantly the integration process will be a major distraction for the firm’s engineers and management.

The much bigger challenge would be to transform Yahoo itself into a company that takes technology seriously. In her news release announcing the merger, Mayer wrote that “Yahoo is the Internet’s original media network. Tumblr is the Internet’s fastest-growing media frenzy. Both companies are homes for brands.” Mayer‘s vision of Yahoo as a media network and a “home for brands” suggests Yahoo won’t be producing great software products like Tumblr any time soon.

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From Apr 28 2014

Yahoo’s chief executive, Marissa Mayer, is about to dive into the shark tank
of television-style original video.
Ms. Mayer announced on Monday evening that Yahoo is
commissioning two original TV-length comedy series that will be shown
exclusively on its websites and mobile apps.
Yahoo is also unveiling a partnership with Live Nation, the large
concert promoter, to stream one concert live on Yahoo every day for a year.
The moves plunge Yahoo directly into the increasingly competitive
world of high-quality digital video. Technology companies like
Amazon.com, Netflix, Google, Hulu and even Microsoft are challenging
traditional producers of television content, such as HBO, AMC and the
broadcast and cable networks, for fickle viewers.
“Users expect online content to be as good as, if not better than, TV,”
Ms. Mayer said at the company’s annual presentation of new digital
offerings to advertisers at Lincoln Center. Yahoo has made serious forays
into video in the past, only to pull back after disappointing results.
But Ms. Mayer and her lieutenants are betting that a big push into
original content, both with video and digital magazines, will draw legions
of new viewers and advertisers to the long-plodding company.
In committing to eight episodes each for the two comedy series, Yahoo
is pledging to spend many millions of dollars in a business where experienced programmers often waste tens of millions before they find a
single hit — and very often those become hits or flops for reasons no one
can anticipate or explain.
“We are in an era of unprecedented change in video,” Kathy Savitt,
Yahoo’s chief marketing officer, said in an interview before the
announcement. “We believe we can be the connective tissue between
creators and viewers.”
Yahoo, which has about 800 million monthly users, has been sprucing
up its video channel, Yahoo Screen, by adding a new mobile app and more
content from “Saturday Night Live,” Comedy Central and Vevo, a music
video site.
But it’s not clear that visitors think of Yahoo, with its plethora of news,
sports, weather and other information, as a place to kick back and watch a
show, especially when it doesn’t have a large library of popular content.
“It’s a me-too gesture,” said David Hallerman, a principal analyst with
eMarketer. “In order to get audience for original programming, people
have to know about it, they have to want to see it and it has to be easy to
watch.”
Americans spend nearly an hour a day watching video online,
according to eMarketer, and the associated ad spending is projected to rise
41 percent this year, to $5.89 billion.
But traditional television is still capturing more of the new ad dollars
that marketers are committing, Mr. Hallerman said.
Ms. Savitt said Yahoo saw big opportunities to bring in advertisers
with its programs, which will include two weekly shows anchored by Katie
Couric and several other lifestyle shows linked to digital magazines that
Yahoo is starting on travel, beauty, fashion and entertainment.
All of the new content will be free to users, supported by traditional
video ads as well as new formats like sponsored landing pages — web
pages that hold the video player and surround the player with an ad — for
each episode.
For the comedy series, she said, Yahoo will be paying fees comparable to what cable and broadcast networks pay. That can range from $400,000
to well over $1 million per episode. But “we’re planning for this, even in
our early days, to be break even, if not profitable,” she said.
The cereal brand Kellogg has already agreed to sponsor the Live
Nation channel. And Yahoo has been working with other consumer brands
like Kraft on new video advertising formats.
One of the new shows, called “Other Space,” will feature the
adventures of a misfit spaceship crew in an alternate universe. It marks the
return to the television format of Paul Feig, one of the creative minds
behind “Freaks and Geeks,” who more recently has focused on movies like
“Bridesmaids” and “The Heat.”
The other show, “Sin City Saints,” will be set in the front office of a
fictional pro basketball expansion team owned by a Silicon Valley
billionaire.
Michael Tollin, an executive producer of the basketball show, said in
an interview that Yahoo’s young, mobile, sports-loving audience was a
great fit for the series. “They are fishing for their phones, tablets or
laptops,” he said, not watching traditional TV.
All eight episodes of each series will be posted online all at once for
binge watching, probably in early 2015, Ms. Savitt said. Two more series
will be announced soon.
Warren Littlefield, who led NBC’s programming in the 1990s and is
now an independent producer, said the lure with outlets like Yahoo starts
with creative freedom and extends to the simplification of the development
process. “You put out a presentation script; they like the vision and then
you get an order straight to series,” he said. That contrasts to the network
system of ordering a raft of pilots, which then get tested and compete for
very few spots on a schedule.
But Mr. Littlefield said he would “be very interested to see what the content looks like on Yahoo and what they do with it.”
He has just started “Fargo,” one of the best-reviewed new dramas of
the TV season on the FX cable network, which is heavily promoting the show.
Would he bring such a project to Yahoo? “That kind of promotional
noise would be difficult to duplicate on a digital platform,” he said.
Jeff Gaspin, the former entertainment president at NBC, said that if
the fees were comparable, Yahoo or other digital outlets would have no
trouble finding show creators willing to sign on.
“If they pay good fees and you control the ownership and the
international rights, you can make money,” Mr. Gaspin said.
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