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Yahoo's New Reality.

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Author: Stone, Brad

Section: Leadership & Innovation
Yahoo's New Reality


The Internet giant offers digital makeovers and other friendly Web fare in its ongoing battle with Google

Lloyd Braun, the head of Internet giant Yahoo's media group, knew just whom to consult earlier this year when he was developing a reality TV show exclusively for the Web. Braun, a former ABC exec, called in Michael Davies, the executive producer of ABC's old megahit "Who Wants to Be a Millionaire." After viewing Braun's seven-minute pilot, a "Survivor"-like battle between two teams to decorate a room with high-tech gear, Davies thought the show was too long and complex for the Internet. He instead suggested that a professional crew help a single contestant with a technology problemâ€"a sort-of "Geek Eye for the Clueless Guy." He also proposed that users submit video of themselves to Yahoo explaining their high-tech quandary, and that other users get to vote on who appears on each five-minute episode. Braun liked the ideas so much, he scrapped his original pilot and hired Davies to helm the new version.

This week "Hook Me Up" debuts on Yahoo in a new portion of the site devoted to high-tech reviews and shopping. Yahoo Tech, as the company calls it, is aimed at unsophisticated technology consumers who won't go near the schematic labels on digital cameras but who are nevertheless getting swept up in the digital revolution. "The market for personal technology has changed rapidly in the last few years to the point where every mom, dad and grandparent is now a consumer," says Yahoo's vice president of content operations, Scott Moore.

But Yahoo Tech is not merely another new offering from one of the Web's major players. It might just portend what the media will look like in coming decades. In addition to the bite-size "TV" episodes, the site will feature links to magazines like Consumer Reports and dispatches from four recently hired bloggers, each focused on a specific audience, such as "moms" and "working guys." All of that sits atop a mountain of material generated by Yahoo users, such as product reviews. Naturally, there's also plenty of room for Yahoo's lifeblood: ads. "This is what the Internet does best," says Jupiter Research analyst David Card. "It takes professionally created content and user-created content and communication tools, and it mixes it all up."

Observers once expected Internet companies to hire journalists and actors and begin producing their own news sites and TV shows. Yahoo Tech, the first major offering from the Santa Monica, Calif.-based Yahoo Media Group, rejects that old construct in favor of a new kind of thinking. Braun has said that he came to realize that original programming on the Web is only the "salt and pepper on the meal." The blogs and reality show on Yahoo Tech take up a small portion of the site. The main courseâ€"pages devoted to products like digital cameras and plasma TVs with links to buying opportunitiesâ€"prominently features user reviews and related postings from Yahoo Answers, a six-month-old online town hall where users answer each other's questions. On the right-hand side of each page, a vertical "MyTech" bar remembers what products you've looked at and purchased, and soon it will tell you what your friends have looked at. "When we have that information about what people own, its going to be simple enough to begin offering upgrade suggestions," says general manager Pat Houston, who joined Yahoo last year from online tech leader Cnet.com.

Yahoo Tech will also be a weapon in the portal's ongoing battle with archenemy Google. Last month Google announced 60 percent growth in profits. It appears to be increasing its sizable lead on Yahoo and Microsoft in the percentage of searches conducted on the Internet. But there are a few areas in which Yahoo still leads, and the company is attempting to press its slender advantages. Yahoo has 200 million registered users, far more than Google, and it gets a good portion of its revenue from big advertising displays on its network, instead of just search ads. That's why Yahoo execs say they are planning more integrated media sites like Yahoo Tech. So expect more TV shows on the Webâ€"just don't count on them being any longer than five minutes.

NO CONTEST … SO FAR

MARKET CAPITALIZATION*

Google
$127.6 billion

YAHOO!
$46.4 billion

*VALUE OF OUTSTANDING SHARES, APRIL 28, 2006

PHOTO (COLOR): GEEK EYE: Houston and Moore want to help consumers become more tech savvy

~~~~~~~~

By Brad Stone



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