Why Aren't We Talking About YahooTube?

By Aaron Goldman, VP Marketing & Strategic Partnerships
Appeared In MediaPosts’s Search Insider

Doesn't that have a nicer ring to it than GoogTube?

And given the fact that its stock is down 35 percent this year and was recently downgraded amid disclosure that online ad slowdowns in certain sectors will negatively impact Q3 earnings--not to mention a delay of the Panama launch -- shouldn't Yahoo be the one scrambling to release some positive news to the Street?

And with MSN officially launching Windows Live Search and gunning for the No. 1 spot in search share while Google steadily increases its lead at the top, shouldn't Yahoo be the one aggressively pursuing increased distribution?

And, after getting beat out by Google to be the exclusive provider of search and text ads on MySpace, shouldn't Yahoo be the one making the next bold move in the social networking space?

When it comes down to it, I can think of 1.65 billion reasons why Yahoo didn't buy YouTube--but today, I'll just focus on five of them:

Yahoo is a Media Company

Google continues to insist that it is a technology company, not a media company. That debate aside, Yahoo has always positioned itself as a 21st century media company. And a commitment to creating original content is a large part of that responsibility. Yahoo has embraced that, as evidenced by such programming as JibJab, the Hot Zone and Ben Stein's How Not to Ruin Your Life.

YouTube does not produce original content. In fact, it is little more than a video hosting site -- maybe, maybe you could call it a video search engine. Regardless, with Apple's iTV set to bring online video to the 10 foot experience, people will be more interested in quality original online programming than a 30 second clip of some boob singing NumaNuma.

The Last Thing Yahoo Needs Right Now is a Lawsuit

A lot has been made of the legal issues inherent in the unauthorized posting of copyrighted material on YouTube. After recently settling a click-fraud lawsuit, Yahoo is ready to stay out of the courtroom for a while.

Yahoo Has Plenty of Video Inventory

Yahoo is currently No.1 in terms of unique monthly video streamers and has more pre-roll video inventory than any other Web property. And, as I just pointed out, it has the means to create more as marketer demand increases -- or generate more through partnerships, like its recent deal with CBS to syndicate local news clips.

Yahoo Needs Results Today

Google is, at best, six months away from figuring out how to optimally monetize YouTube's video inventory. Since its content ranges so widely in terms of topics--and quality, for that matter-- the best application of advertising on YouTube lies in algorithmic keyword relevancy and non-intrusiveness, as I discussed in my last column, "What Can YouTube Learn From Search?"

With $10 billion cash in its war chest and its stock price at $430 and climbing, Google can afford to wait at least six months for this investment to pay off. Yahoo does not have that luxury. It needs to focus all of its search development resources on completing the Panama launch. Generating a higher yield from the 2 billion searches it already has each month will make a much greater contribution to the bottom line--as well as the user experience--than the additional distribution from YouTube would.

There's Always Facebook

FaceHoo? OK, so it doesn't have quite the cachet of YahooTube, but it is a nice consolation prize.

Rumors are flying about a potential Yahoo acquisition of Facebook and, while its platform is quite different from YouTube, it has a similar audience and that same element of user-passion and participation.

And with Facebook recently opening its doors to everyone-- not just students--it has the opportunity to reach MySpace proportions. That 's a goal it can reach with proper marketing and continued innovation--resources which Yahoo can certainly bring to the table.

Facebook has a much stronger social network than YouTube (where user interaction is limited to comments and video replies). As such, excellent opportunities exist for Facebook integration with Yahoo-owned del.icio.us and Flickr. Together, these properties could create a pretty powerful Web 2.0 experience, all within the Yahoo domain.

Now, think of the search marketing implications. With the added demo and behavioral data of Facebook--whose users join groups based on stated interests --Yahoo would have the ability to overlay keyword search activity with self-selected audience affinities. Combine this with the passive behavioral data aggregated by monitoring surfing habits (i.e. Yahoo Finance, Sports, etc.) and Yahoo's vast reach (106 million+ monthly uniques) and you have some serious scale for creating niche audience targeting profiles.

And that scale will only get bigger with some savvy cross-promotion. Yahoo has never been shy when it comes to promoting its own content--witness its shortcuts on search results pages above third-party organic listings. Facebook currently has over 14 million monthly uniques but, more important, over 5 billion monthly page views. Pushing this audience to view Yahoo search results each day will help it ward off MSN--which currently has the rights to all third-party advertising on Facebook--and close the widening gap with Google for search share. Toss in some contextual listings, and the Facebook inventory becomes even more valuable.

Only time will tell if sitting idly by while Google gobbled up YouTube was the right play for Yahoo. For its sake, let's hope that idly turns to wildly and compels Yahoo to lock up Facebook. In addition to helping deflect recent unfavorable analyst coverage that has hurt its stock value, a Facebook acquisition would position Yahoo to be the leader in Web 2.0 social media. Marry the behavioral profiling opportunities with an effective launch of Panama, and Yahoo stands poised to significantly increase its share of digital marketing budget while generating more profit from each search marketing dollar spent.

Now that would give everyone something to yodel about.


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