TELECOM Digest OnLine - Sorted: Yahoo Reprograms Online Video Service

Yahoo Reprograms Online Video Service

Michael Liedtke (
Thu, 1 Jun 2006 12:05:54 -0500

By MICHAEL LIEDTKE, AP Business Writer

Yahoo Inc. is reprogramming its online video service so it's more like, an Internet upstart that has amassed a large audience
during the past year with a free Web service that encourages people to
post and share homemade clips.

Under the changes unveiled Thursday, Yahoo will store homemade videos
on its own site for the first time as it attempts to build a platform
for people to browse and rate the clips. The videos will be separated
into different categories, including a section devoted to the
most-watched selections.

Those features mirror YouTube, which has become the Web's most popular
video channel since a pair of twentysomething technology whizzes
started the San Mateo, Calif.-based company a year ago.

Now, Internet heavyweights like Sunnyvale, Calif.-based Yahoo are
trying to chip away at YouTube's early lead as the rapidly growing
number of high-speed Internet connections make it easier to transfer
and watch online videos.

Just two weeks ago, Google Inc. retooled its video service so a
special piece of software would no longer be required to upload clips
to the online search engine leader. Meanwhile, Time Warner Inc.'s AOL
is testing a service, called UnCut Video, that accepts clips.

Since launching its video service in late 2004, Yahoo has focused on
indexing the clips available on other Web sites.

Although the company intends to continue indexing material from other
sites, Yahoo is betting it will be able to lure more visitors and give
them more reason to stick around longer by creating a unique video
library through submissions from its 208 million registered users.

"We felt this was a necessary next step in our evolution," said Jeff
Karnes, Yahoo's director of multimedia search.

Yahoo has been adding more attractions to its Web site to maintain its
status as the Web's most trafficked destination and spur even more
spending by advertisers -- the main source of the company's revenue.

By accepting homemade videos, Yahoo risks showing material that
infringes on copyrights or contains pornographic scenes. Both of those
problems have cropped up on YouTube, despite restrictions prohibiting
users from posting such content.

Like YouTube, Yahoo will depend on its own users and copyright holders
to flag rule-breaking videos so they can be removed from the site. To
minimize the chances of an offensive video appearing before a big
audience, Yahoo editors will screen all the clips that are featured on
the service's front page, said Jason Zajac, the company's general
manager of social media.

Yahoo will have to make up a lot of ground to catch up with YouTube,
which boasts of streaming more than 40 million videos per day.

In April, YouTube attracted 12.5 million U.S. visitors, well ahead of
MSN Video's second place service at 9.5 million visitors, according to
Nielsen/NetRatings Inc. Yahoo's video service attracted 2.6 million
visitors, trailing rival offerings from, Google and AOL,
as well as YouTube and MSN, Nielsen/NetRatings said.

Although it leads the rest of the video pack, YouTube still hasn't
proven it can make money as it subsists on $11.5 million in venture
capital. Yahoo, in contrast, earned $160 million during the first
three months of this year and ended March with $1.4 billion in cash.

On the Net:

Yahoo Video:

Copyright 2006 The Associated Press.

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