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Tuesday, March 08, 2005

The UnGoogle is going Hollywood

MediaReview: The UnGoogle is going Hollywood

Bill Gannon of Yahoo had some interesting things to say at last week's Niemann conference.
Here are some excerpts from Michael Malone's piece on Yahoo in the March Wired.

Because they're only a click away from countless distractions, Web users are, at least in theory, incredibly mobile. But they're also creatures of habit; they settle in quickly and become comfortable, whether online or off. Once you take the time to set yourself up on a site, change can be difficult - you have to notify your address book, copy your stock portfolio into a new table, reload your travel destinations. This pain-in-the-ass factor saved Yahoo! from disaster....

A comScore Media Metrix study puts it even more bluntly. In the second half of 2004, Yahoo! increased its share of the search market from 27 percent to 32 percent, while Google dropped from 37 percent to 35 percent - putting the two companies in a virtual dead heat. These findings, along with the fundamentally different approaches to business, would seem to point to an epic clash between Yahoo! and Google.

Yahoo! is going Hollywood. Late last year, the company announced the opening of a new entertainment division, run by former ABC television exec Lloyd Braun. The division, based in Santa Monica, California, incorporates the company's movies and music services along with games, news, sports, and finance.

What does Yahoo! have to offer Hollywood? It's a new distribution channel. Semel imagines Yahoo! delivering rich content to any Web-enabled device at any time, a vision that could make Yahoo! the obvious next step in Hollywood's Internet strategy. "I can easily see using my credit card to pay Yahoo! to watch a first-run movie on my computer in five years," says UBS Warburg analyst Ben Schachter.

Semel doesn't just want to deliver movies. He's intent on making Yahoo! more personal. Customizing the site down to the neighborhood level will make it more appealing to users and indispensable to advertisers. "If you are looking for a plumber or a pizza parlor, you don't want one 3,000 miles away," Semel says. "You want your search to be customized just for you."

As a 10-year-old Yahoo! looks to the decade ahead, there are powerful forces driving the business. Technological change and further customization will be constants. But there's another factor that excites cofounder Jerry Yang enough to keep him coming into the office every day: the network effect. "All those things we talked about in the early days of the Internet are just now starting to come true," he says. "Access isn't sufficient. It's not enough to search. You also have to find - and then share with others. That's where this company is going and I want to be there to see it."

But what motivation can Semel, the mastermind behind Yahoo!'s turnaround, find to keep making that 700-mile commute every week? Simple. If he can keep Yahoo! rolling on its present course, he'll go down as the studio-exec-gone-tech who built the long-imagined bridge between Silicon Valley and Hollywood.


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