Yahoo! searches streaming video - Broadband Content - Cover Story

Yahoo!, the 800-pound gorilla of the Internet, has seen the future of broadband, and they call it FinanceVision. And ShoppingVision. And SportsVision.

At the core is streaming live video, surrounded by -- depending on the site -- news headlines, stock quotes, sports statistics, e-commerce links and even a browser that allows users to surf while staying on the page.

The star is Yahoo!'s FinanceVision, which the Net portal company points to as a template for consumers and content providers, says Stan Woodward, VP- business services.

"This is kind of our shot at interactive TV," he says. "We can take anybody who might provide content, and we can take those people up the food chain -- more broadband, higher speed, more interactive."

The key to making money with the FinanceVision model is high quality video, the company says.

"Streaming video drives purchases," says Woodward. "People tend to purchase more when they're given some form of graphical image or moving image around what they're buying."

Researchers agree Yahoo! is traveling down the right track.

"We like FinanceVision," says analyst Billy Pidgeon of Jupiter Research. "It's a good stab at integrating video with other multimedia content on a Web page, and, with effective advertising, it's a great promotional vehicle."

Yahoo! knows how to handle streaming video. One study estimates there are 200 million hours of available streaming video on the Net. Yahoo! accounts for about half of that, says Woodward.

All that streaming video requires broadband, and that's where Yahoo! sees its future. The company boasts the Net's largest broadband audience with 67 million people at home and work, far ahead of dial-up-oriented AOL, says Woodward. By 2003, Yahoo! is looking for up to 30 million home broadband users.

"That will then give us, and give sponsors, a critical mass of users online," he says. "We could have pay-per-view, syndication, sponsorships going on different programs -- it will look more like interactive TV at that point."

To help scale its capabilities, Yahoo! has moved onto traditional television and radio turf in a series of deals with a particular eye toward sports programming.

In October, the portal announced an agreement with the National Football League, allowing it to transmit virtually everything except video feed itself -- audio, statistics, play-by-play and more. The company has similar arrangements with the National Basketball Association, the Women's National Basketball Association, Major League Baseball and the National Hockey League.

Yahoo! even broadcasts some live sports video through a deal with Learfield Communications, Enlighten Sports and ISP Sports.

Yahoo! makes money on many of the broadcasts with payments from teams or participating radio stations, Woodward says.

The sports coverage adds to Yahoo!'s highly promoted events broadcasts, such as the Country Music Awards or Victoria's Secret fashion shows.

While television-style sites such as FinanceVision might seem to threaten cable channels, such as CNBC, Woodward insists Yahoo! would prefer to team up with content providers rather than compete with them. They created FinanceVision only to show it was possible, he says.

"We planted a seed -- our long-term goal is not to create our own content," he says. "But until you create it, sometimes people don't understand how serious you are about it."

Woodward refuses to reveal if FinanceVision pays for itself, saying only that Yahoo! is pleased enough with the product to make it the company's preferred new broadband platform.

As always, revenue is the key question, says Tom Adams, president of Adams Media Research.

"They'll always be able to sell ads on the main page and have a decent revenue stream from that," he says. "But as you start drilling down into more special interest areas where there are fewer and fewer consumers -- and therefore less and less interest from advertisers just for general bannering -- you have to find some interesting ways to generate money."

Steve Vonder Haar, a Yankee Group analyst, questions Yahoo!'s vision that it can take categories and "slice and dice 'em" to create audience segments that are appealing to advertisers.

"In theory that works," he says. "In practice we have yet to see it."

Unless and until FinanceVision and its offspring begin generating revenue, Yahoo's biggest moneymaker remains business services such as distance training, in-house corporate TV channels and stockholder meetings. There, too, FinanceVision can serve as a template for companies that would like to run a similar site with their own content.

"USA BancShares is running a version of FinanceVision on their site, and sponsors are lining up," Woodward says.

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