Yahoo(YHOO) – more confusion ahead???

By: ispeculatornew
Date posted: 03.18.2009 (4:00 am) | Write a Comment  (0 Comments)

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yhoo1A few years ago, Yahoo had emerged from the dot com bust with a little confusion about what it was. It has always been a bit complicated to explain what Yahoo is about. Google (GOOG) clearly has stated its objective to “Organize the world’s information” and generally has been consistent with that message. Yahoo on the other hand has many different goals, mostly related to being a web directory but also offering various services related to dating, finance, etc. Many of the users do not even know that the service they are using is powered by Yahoo.

However, one thing that was clear from a few years ago was that it was not in the business of producing content, only delivering them. And that made sense because one of the problems of Yahoo is its lack of focus. But on Monday, they announced the launch of a series of niche web shows that they say will not be competing with tv shows. Perhaps true, but it is once again difficult to see what Yahoo’s goal is with this new project. “We may have come at it from the wrong way in the previous era,” Sibyl Goldman, the head of entertainment for Yahoo, told the New York Times. “The one-way model – ‘We think this is great, we hope you come watch it’ – may have been more of a TV mindset,” she said.

Could it be profitable? Yes of course, there is no doubt that it could become so. But I somehow doubt that Yahoo currently has the creative team to make this happen which will force the company to spend much needed time and energy on a new project that could be spent elsewhere. Improving the finance network as well as the search and advertising capabilities seem to be higher priorities in my opinion. They are banking on sponsorship deals with companies such as Verizon and State Farm but that again seems like a short term move.

And if Yahoo really thinks it should have an important online presence online, it would have been much better to spend energy on building it in earlier stages. Now that competitors from Youtube to Hulu or have gained such an important market share, it will be very expensive to catch up from the slow start Yahoo had in this sector.

They claim to be getting 400,000 views on short clips, which is still very far behind Youtube’s daily hits in the tens and hundreds of millions. Just seems like Yahoo is either very late to the game or should have never even entered this one….

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