Yahoo: What's Next?

Unlike Google, Yahoo has no shame in recognizing its presence as a media company. Many tech pundits have forecasted a future that includes Yahoo in the same breath as ABC (Disney) and NBC (GM). Yahoo C.E.O. Terry Semel spent 24 years at Warner Bros and is a more than logical choice for a tech company that is yearning to create content like they do in sunny SoCal. Recently Yahoo has left efforts to create exclusive online content with production companies however they are immersed in the Hollywood inner circle. Few have that V.I.P. pass, another reason why Semel and the Yahoo Entertainment offices are in LA. With the creative minds, hollywood handshakes and deep pockets its no mystery that they are positioned to be a big time player. But the question today might be what are they waiting for? Are they getting beat by the same moxy and innovation that Filo and Yang had when they started the internet portal in 1995?

The hollywood hubris has yet to lead to big dividends. Instead of acting like a nimble innovator that adapts with change, Semel's entertainment division is getting left in the dust. User-generated content has grown quickly in the so-called web 2.0 arena and YouTube, Grouper and Clipshack are leading the pack. Nimble companies that are navigating a marketplace driven by a participatory culture. But wait, Yahoo is not blind to the me mania. Flickr, arguably the best organized and cleanest designed photo-sharing site on the web was a Yahoo acqusition in March of 2005. Del.icio.us, the tag everything with keywords and organize bookmarks site was a Yahoo target in December 2005. Just last week Yahoo relaunched their video site to look less like Google video (a user interface nightmare) and more like its young competitors. Mostly Yahoo gets it. But when it comes time for Semel to shine his roots are as relevant as the old studio system.

The online video universe is rapidly expanding and as consumers take back more control of when, how and what they get then the more options that arise. But its a quantity not quality marketplace. Most of the content online is nauseating home video. If its relevant to you because its from friends or family then it carries value otherwise a small percentage is good because it quenches our morbid curiosity. Meanwhile the door remains open for a company to take charge and build an incredible brand by creating interactive and interesting content.

I am not suggesting that media companies create networks online. "Check your local listings" is a phrase that future generations will find as funny and as odd as black & white television. A linear format does not make any sense for an on-demand, always at your fingertips online experience to be had in my Tivo lifestyle. That said, the web is portable, interactive and personal because of the control we have as participants not just consumers. I don't want to just listen. I want to react, laugh, learn then shout, tell friends, get lost in the excitement, write, shake my head, figure out how that thing works, take it in then spit it out and do it all whenever I want.

The future of video content on the web is not about making it more like television. In fact it will become less and less like traditional tv. Series like CSI, Desperate Housewives and Curb Your Enthusiasm may find the web to be a succesful additional revenue stream. But given the choice we all know we'd rather watch those shows on our big screens rather than our laptops. That's ok. If content is more "consumer" controlled then its a win win. I can see it if I want to download it and they can make money because I did. But this isn't a peek into the future of internet content. New shows can be added every week to existing distribution platforms or new channels and it really doesn't matter. Its something that should have happened already if not for studio execs controlling out of fear (that someone in some far away land would pirate copies to the rest of the world.)

So how does Semel get past the traditional model of the hollywood system to capitalize on the role of Yahoo as a media company?

The quality of content available on the internet is subpar. The internet is by nature a shared environment of far greater interactivity for its users than that of traditional forms of media. Innovation has come from those sharing their lives with one another online. The collective inteligence that is tapped in sites such as Flickr and del.icio.us can be further explored in how we not only interact with one another but the information we seek out.

The future of internet video is in non-linear programs that encompass more than just video. The next step is capitalizing on an interactive environment by creating meaningful experiences that extend far beyond the limitations of tv's talking heads. No longer does the channel need to be more important that the information or entertainment. Take tools such as IM, picture sharing, webcams, email, video downloads, blogs and tagging then apply them to the latest news headline or movie review or celebrity gossip.

Then you open up an arena of communication that allows us to not just see the same soundbyte over and over again. Instead we understand, learn or are entertained by how we navigate the content. An almost "choose your own adventure" way of exploring a topic. If you want to sit back and take it all in without public reaction you can do so just as easily as you can fire off votes for your favorite player, share your side of the story or comment on another's opinion.

Yahoo has the infrastructure in place to reach an enormous audience and change the way people relate and share information, again. Web 1.0 may have been about accessing information, this time around the internet may be used more for entertainment but it still isn't your big screen so it needs to adapt with the needs of its participants.

Organization is key to the experience. Yahoo has definitive categories from Entertainment to Finance to Music, News and Travel. These topics could immediately translate to users on a video site where the content was influenced by the participants. Where users not only consumed but created.

As for hollywood parties and melon martinis they may be mildly entertaining until the gate keepers realize that content for TV and the Internet aren't interchangeable. Until then expect more television classics in stunning mpeg4 320 x 180.