Google-owned YouTube hasn’t had a serious competitor for years. But Yahoo would like to try: The Web giant has been working on a plan to lure some of YouTube’s most popular stars and networks to show their stuff on the site, according to several sources close to the situation.

The strategy in the works — which Yahoo hopes to launch in the next few months — is aimed at taking advantage of persistent complaints by both video creators and owners, who think that they don’t make enough money on YouTube.

Yahoo CEO Marissa Mayer has been mulling how to have a much bigger presence in Web video. Under her leadership, the company tried and failed to buy France’s DailyMotion and has been pushing a number of other high-profile media initiatives, such as adding television news star Katie Couric to its site.

But creating an online video service is a much bigger deal and is not just conceptual — several industry sources say Yahoo has recently been approaching individual YouTube stars and some of the big networks now on the giant online video service.

The come-on? Yahoo executives have told video makers and owners that the company can offer them better economics than they’re getting on YouTube, either by improving the ad revenue or by offering guaranteed ad rates for their videos.

In addition, Yahoo has offered extensive marketing, even on its home page, as well as allowing video producers the ability to sell advertising along with Yahoo’s sales force.

“Yahoo Screen was part one,” said one producer who has agreed to be part of Yahoo’s video effort, about its current offerings. “Now, this is part two.”

For now, at least, Yahoo isn’t talking about replicating YouTube’s open platform, which lets users upload 100 hours of content every minute to the site. Instead, it is interested in cherry-picking particularly popular, more professional YouTube fare.

Yahoo has also told some video owners that it can use its well-trafficked home page and other high-profile real estate to promote their clips on a non-exclusive basis.

After a year, one source inside Yahoo said, it might open the platform up further. One source inside the company said that Yahoo is prepping a new content management system for the effort, although some have suggested it could also buy an existing service like Vimeo.

Mayer — a former Google exec who has imposed an awful lot of Googley ideas on Yahoo since she got there (imitation is the sincerest form of flattery, ya know!) — has been pushing the effort. It is all part of her valiant and doubtlessly exhausting attempts to turn around the Silicon Valley Internet giant. So far, other than the spectacular run of its Chinese asset, Alibaba Group, that has boosted Yahoo stock, the core business continues to lag. That giant sum of money from Alibaba could easily pay the costs of mounting a challenge to Google, which some might think a fool’s errand.

But Yahoo needs to show it can grow. Sources inside the company said the first quarter — which ends right about now — was also lackluster, even as investors have been watching for signs that Mayer can turbocharge the business after two years in the job. Video is obviously an explosive area and an arena in which Yahoo can perhaps offer a credible alternative.

All of what it seems to be offering certainly runs counter to what’s available at YouTube, which takes a 45 percent cut of ad revenue, doesn’t offer guarantees and insists on relying on computers, not humans, to pick videos it thinks users want to see.

That environment has generated lots of grumbling from YouTube’s partners over the last couple years. And it has prompted many big YouTube players to try to build businesses outside of the world’s biggest video site as well, either on sites they own themselves or with other video portals, like Microsoft’s Xbox.

New YouTube head Susan Wojcicki has begun making overtures to its most high-profile producers, said sources, with an eye to making them happier. Wojcicki, who has been a prominent ad product exec at Google and one of its earliest employees, has deeper experience in generating revenue with a multitude of partners, and many are looking forward to seeing how she will change the service’s offerings.

Nevertheless, sources said, she and YouTube still consider the platform to be the best there is, in terms of reach and monetization, for video makers. “Yahoo tried to keep up with Google and AdSense in online ads, but they tend to settle where they get the best results,” said one person.

Having the giant YouTube dominate the online video space is frightening to many. But while video makers have openly pined for a well-financed competitor to try taking on YouTube directly, none have surfaced yet. Both Facebook and Amazon are also kicking around plans to move more aggressively into ad-supported video, as The Information and The Wall Street Journal have reported.

Meanwhile, investors are showing renewed interest in YouTube-related businesses, sparked by Disney’s $500 million acquisition of Maker Studios, a YouTube network with 5.5 billion monthly views. Last fall, Erin McPherson, who at the time was Yahoo’s top video executive, joined Maker as its chief creative officer.

We’ve asked Yahoo for comment via email but have not heard back.

Dawn Chmielewski also contributed to the reporting of this story.



10 comments
UltraSlo
UltraSlo

 I started my YouTube channel in 2007 and it was a success. The UltraSlo channel grew into a business and a pretty good one at that. We have served over 200 million videos on all of our sites with 87 million on YouTube alone. During the last 4 years or so The channel evolved into not much more than a hobby and SuperStorm Sandy finally did it in. I am rebuilding the studio and the channel now. I turned to the CDN's to improve my results.I found that they took their cut off the top and provided little support, traffic or increased revenue. I am looking forward to see what Yahoo is up to with great anticipation. I have been at this for a long time and have found that I will need to go back to what worked years ago and build my little world over again. As a content creator YouTube was a great partner then tried to be everything to everyone so welcome YaTube I am sure you will find some good new friends if you really take care of them.

David Beebe
David Beebe

Having created and Executive Produced two top performing premium series for Yahoo (36 episodes of Ultimate Proposal/Ultimate Surprises with Cameron Mathison and 24 episodes of Stunt Nation with Sal Masekela), the argument that they can pay more and use their well trafficked homepage is BS and here's why. 

1. There is a big problem internally at Yahoo - all of the different groups fight daily for the homepage - it has limited real estate. Sure, your content is on the homepage for a day and can get millions of views, but once it's moved off, the views stop. Now you're going to try third party produced content to add to the mix? 

2. The video player video product is bad and not easy to share or engage with. 

3. The most important - understanding user intent. People go to YouTube to watch videos - that's it. People go to Yahoo to check email, news, etc - not to watch video. You have to understand the viewer and WHY they go to your site. Just because your homepage receives a shit load of visitors, doesn't mean you can force content to them that they didn't have the intent to come watch. If you want to be a competitor to YouTube - then lead with video and that's it and build a platform that enables easy viewing, sharing, and engagement. 

4. Not having an open system where you can upload videos, manage your channel, and engage directly with the audience will not work. Good luck navigating Yahoo's CMS.

BruceAlmighty
BruceAlmighty

And this "YaTube" will be as successful in video category as Yahoo Search in search category

video_pro
video_pro

I also hear Marissa and team have been trying to woo other companies that can bring overs top YouTubers and their audiences. Bringing these tools/features in-house, combined with Yahoo's advertising promises (especially around native ads), Yahoo can create a much better value for video producers than YouTube presents.

yahoomailproblems
yahoomailproblems

yahoo has gone downhill with all its upgrades which r laggy glitchy very user unfriendly....yahoomail has become unusable ......yahoo has lost touch with its demographics....

charlesjo
charlesjo

1999 Mark Cuban called? Seriously though, competition should be good.

TechCheck
TechCheck

 Youtube is ripe for a big-name competitor. For over a year now the talk on the I-street has been a collective wish for Yahoo to provide a video service which undoes the inanity of Google's follies into Real Name, G+ integration, over advertising and poor suggestion customisation.


It's a perfect fit for Yahoo's brand, content history and media aspirations. Where google is search, Yahoo will be media.

Sam Whitmore
Sam Whitmore

Marissa is totally on the right track. Most people would rather watch than read. The huge undiscovered opportunity is with viewers who are not white. Guess who is keynoting at the AHAA event next month? Your former boss...

elio_enidias
elio_enidias

Ad revenues are the least efficient business model. Yahoo just doesn't seem to get this fact, which is much older than the internet.

zato
zato

This is exactly what Yahoo should do.

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