Yahoo! defends scaling up content offer

Yahoo! has defended its strategy of focusing on producing original content to drive revenue growth, in the week it announced it was to axe 14% of its global workforce.

Yahoo

CEO Scott Thompson announced the restructure yesterday (4 April) as part of a move to become “a bold, new Yahoo!”, intensifying its efforts on its core businesses, which include its media production and online video distribution arms.

Speaking to journalists this morning (5 April), James Wildman, Yahoo!’s managing director and vice president of sales for the UK and Ireland, echoed his CEO’s sentiment of focusing on the services the company is “winning in” and aiming to continue its lead as a “global digital powerhouse”.

“Content is a focus for us and we are qualified to lead that debate as the biggest digital publisher in the UK in terms of the number of users that seek our content,” he adds.

He claims Yahoo! has just overtaken Sky in terms of visits to its sports coverage and surpassed MailOnline to become the biggest lifestyle website in the UK. Around 14.5 million of Yahoo!’s 27 million average monthly visitors access the content segments of its website.

Yahoo! currently has around 50 in-house editorial staffers, but Piers North, the company’s head of strategy for the UK, says it is facing “massive pressure” in generating enough content to meet consumer demand and make a return – and this is before any redundancies are made.

He adds that the company has two options: to run behind a paywall, or to “find a way to do it sustainably”, which is why it launched its answer to AOL’s the Huffington Post last month.

Yahoo! Contributor network allows journalists, bloggers and consumers to moonlight and get paid to write for the website. The author’s nominal fee incrementally rises per 1,000 views their article attracts.

North adds: “You could perceive that as cheap but to scale [our content offering] out is a big challenge.”

Yahoo! has also intensified its focus on hosting high quality video content this year, which it says now accounts for around 10% of its UK display revenue and it has also begun to make a return on investment.

Wildman says: “As we videofy the web, advertisers are blurring the definition between online video and TV….[but] we have far more demand than we have supply.”

Advertiser-funded videos will counter lack of resource in producing and hosting video content in-house, North adds.

He says: “[The] video [issue] isn’t solved by UGC, that’s why ad funded video becomes the future. You will see more product placement [on Yahoo!] but that does require a longer lead time.”

Earlier this year Yahoo! formed a creative ad unit, dubbed Yahoo! Studios to offer brands more solutions that better link editorial and advertising – including advertiser funded programming.

Across the market, ad expenditure on online video formats such as pre-roll doubled year on year to £109m in 2011, according to figures from the Internet Advertising Bureau and PwC.

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