Yahoo to Revamp Its Video Service
Yahoo Inc. is reprogramming its online video service so it’s more like YouTube.com, an Internet upstart that has amassed a large audience during the last year with a free Web service that encourages people to post and share homemade clips.
Under the changes unveiled Wednesday, Yahoo will store homemade videos on its own site for the first time as it attempts to build a platform for people to browse and rate the clips. The videos will be separated into different categories, including a section devoted to the most-watched selections.
Those features mirror YouTube, which has become the Web’s most popular video channel since a pair of technology whizzes in their 20s began the San Mateo, Calif.-based company in February 2005.
Now, Internet heavyweights such as Sunnyvale, Calif.-based Yahoo are trying to chip away at YouTube’s early lead as the rapidly growing number of high-speed Internet connections make it easier to transfer and watch videos online.
Since launching its video service in late 2004, Yahoo has focused on indexing clips available on other websites, but it is betting it will be able to lure more visitors and give them more reason to stick around by creating a unique video library through submissions from its 208 million registered users.
Yahoo has been adding attractions to its website to maintain its status as the Web’s most-trafficked destination and spur even more spending by advertisers, the main source of the company’s revenue.
Yahoo will have to make up a lot of ground to catch up with YouTube, which attracted 12.5 million U.S. visitors in April, well ahead of MSN Video’s 9.5 million visitors, according to Nielsen/NetRatings. Yahoo’s video service attracted 2.6 million visitors, trailing offerings from MySpace.com, Google and AOL, Nielsen/NetRatings said.
Although it is the leader, YouTube hasn’t proved it can make money as it subsists on $11.5 million in venture capital. Yahoo, in contrast, earned $160 million during the first quarter and ended March with $1.4 billion in cash.
