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Yahoo! chief and co-founder Jerry Yang (right) and Nasdaq VP of sales,
Brian Wilson, toast the launch of Yahoo FinanceVision, March 24.
WASHINGTON,
July 10 — As Yahoo! evolved from a Web directory into an Internet
giant, it has made many changes. Over its half-decade history, the company
has added community tools like personal homepages and instant messages,
and e-commerce resources like auctions and stores. But a new offering by
the company — which is due to report its latest quarterly results
Tuesday — may mark a significant change in Yahoo's strategy. With the
introduction of its FinanceVision business news site this spring, Yahoo
has made its first foray into original news content.
NEWS
AND OTHER information has long been a staple of Yahoo. But none of the
articles on the site are actually written by Yahoo employees. Instead,
Yahoo collects news from numerous partner sites. It's called content
aggregation — collecting and redistributing information and has been the
driving philosophy behind everything Yahoo has done since its inception.
Every
aspect of Yahoo's strategy has been based on the philosophy of
aggregation. Take Yahoo's approach to e-commerce, for instance: instead of
selling products like Amazon does, Yahoo helps businesses put their goods
online, then offers a directory of the Yahoo stores.
Yahoo
will be under much scrutiny this week as it delivers its earnings after
the bell Tuesday for the quarter ending June 30. The biggest of the
portals and the first Internet company to deliver its earnings, Yahoo's
quarterly announcements have become a bellwether for the industry.
Analysts
expect Yahoo to report earnings of 10 cents a share on earnings of $247
million, compared to 5 cents a share on $128.6 million in earnings over
the same period in 1999. As Yahoo consistently has beaten analysts'
official expectations, the "whisper number" is 11 cents a share.
Yahoo's
shares have been beaten down in recent weeks — losing about 25 percent
since being downgraded to neutral by Lehman's Holly Becker, who said the
stock was overvalued at 80 times its sales, compared to other Internet
stocks trading at 20 times sales.
THE
NEED FOR NEW AREAS
One thing most analysts agree is for Yahoo to keep growing, it needs to
push into the hot new areas — especially wireless markets and broadband
offerings. Yahoo has been actively pursuing the wireless market — Yahoo
enabled cell phones and PDAs — since its acquisition of Online Anywhere
last year. But what about broadband?
That's
where FinanceVision comes in. Launched this spring, FinanceVision offers a
sophisticated combination of video, relevant links and Web surfing. The
"channel" offers a continuous live broadcast of news and
interviews during market hours in a portion of the screen while pushing
out links to news stories on whatever topic is being discussed. The end
result is that while a user watches a CNBC-like interview with a company
CEO, she can be simultaneously reading other news on the company, tracking
her portfolio and trading the stock at her online brokerage.
"The
idea was why not put it all in one place," said Eric Scholl,
executive producer and director of FinanceVision. "We tried to put it
all in one-stop shopping as much as possible. Part of what we're selling
is speed."
'HUMAN
AGGREGATION'
Scholl, one of the founders of CNNfn, was recruited by Yahoo for his
business news experience. But Yahoo and Scholl vehemently deny that they
are doing news with FinanceVision, even though they have anchors who
conduct interviews and report on the latest business developments in
Silicon Valley.
"This
is a way of putting a face and a voice on Yahoo," said Scholl.
"I don't know that it's the same as what CNN and CNBC are doing with
their anchors. We're not in the news-gathering business. We don't go out
and cover stories."
Some
FinanceVision spokespeople and anchors even go so far as to call it
"human aggregation" rather than news. They'll explain to you
that they're not really interviewing the CEO, they're aggregating his
words and video.
Uh huh.
As the saying goes, if it walks like a duck and talks like a duck… well,
FinanceVision is quacking and waddling.
Piper
Jaffray analyst Safa Rashtchy, who is extremely bullish on Yahoo, said the
idea of the company producing its own content is one that runs contrary to
everything Yahoo has done before.
"That
was the key question I had when they first announced FinanceVision,"
Rashtchy said. "They don't want to be competing with CNBC."
But
Rashtchy said the move makes sense as long as it is temporary. With the
largest at-work audience of any Web property according to Nielsen's
NetRatings, Yahoo has the largest number of users with high speed, or
broadband, connections. Coupled with the fact that Yahoo!Finance is the
most popular area on Yahoo, and FinanceVision was a natural fit, Rashtchy
said. To start the channel, though, Yahoo had to make its own content.
"I
don't think they will be the producer forever, but they had to start with
something," said Rashtchy. "They will make their content more
general."
Scholl
agreed, saying Yahoo will increasingly get its video and news packages
from partners like CBS Marketwatch. The reason they had to build studios
in their Santa Clara, Calif. headquarters was that there simply wasn't the
video to aggregate in a timely fashion the way they do it with text-based
news which is available from numerous wire services and web sites.
"What
it comes down to really is it's a lot harder to aggregate video than it is
to aggregate a print story," Scholl said.
Yahoo
sees FinanceVision as the first of many similar channels for content. One
likely candidate for a similar site would be sports, said Scholl. But it
even goes further, he said. Yahoo also plans to license the platform and
proprietary software to other companies to use for their own intranet or
internet channels.
"You
can think of it as X-Vision," said Rashtchy, "where it will
become FinanceVision or SportsVision or whatever." |
