FRANCISCO — When Yahoo announced last year that it had
lost $42 million reviving NBC’s TV series
"Community" and launching two other original
shows, the company framed it as a failed experiment. It
didn’t work, so Yahoo was cutting its losses.
those in the entertainment industry were scratching
their heads: How could the company call it quits without
after all, had spent $100 million on its first attempt
at original programming — two seasons of "House
of Cards." Amazon spent $3 billion last year on
content for its Prime video and music streaming service,
double what it spent in 2014.
is a go big or go home business," said Brian Wieser,
an analyst with Pivotal Research Group. "Call me
when you’ve invested $4.2 billion in content, then it
comparably small expenditure differs from the strategy
embraced by the companies that dominate streaming
entertainment. But those familiar with the Sunnyvale,
Calif., firm say it illustrates a recurring stumbling
firm has long struggled with its identity, flip-flopping
between its roots as a technology company and its
ambitions of becoming a media giant.
the company now up for sale — Yahoo is reportedly
looking at a second round of bids sometime this month
— it’s still unclear, after all these years, what
Yahoo really is.
started as a guide to the internet, steering early
explorers of the World Wide Web to the most interesting
sites around. As the internet matured, Yahoo grew into a
portal, offering search, email, news, entertainment and
anything else around which it could sell advertising.
But when the portal model fell out of favor, firms like
Yahoo struggled to adapt.
have since eclipsed nearly every facet of Yahoo’s tech
business. Google long ago won search. For nearly a
decade, Facebook has owned social. Everyone else won
has been the place where Yahoo has staked, and then
retracted, its claim.
company has Yahoo Finance and News — long-running
websites that for years have drawn huge amounts of
traffic (the company’s collective websites drew 205
million visitors in March this year, according to
ComScore, putting Yahoo behind only Google’s sites and
each of Yahoo’s attempts to grow beyond that — to be
a hub for original scripted entertainment — have ended
with it pulling back and pivoting elsewhere.
had the ability to be a transformational media
company," said Peter Csathy, chief executive of
consulting firm Manatt Digital. "It has all the
assets you’d need to be successful — massive reach,
globally known brand, some high-quality content and a
sales team that has been effective — but it was never
able to tie those pieces together."
2004, the company hired former ABC executive Lloyd Braun
to head up its media group, which was tasked with
creating original programming that could give Hollywood
a run for its money.
who had green-lighted shows such as "Lost,"
"Desperate Housewives" and "Grey’s
Anatomy" at ABC, helped Yahoo launch original
programming such as the daily video compilation show
"The 9" and the multimedia website "Kevin
Sites in the Hot Zone."
within two years, the company changed course. Its foray
into television-style programming was now described by
Braun in an interview with the New York Times as being
"salt and pepper on the meal" as opposed to
Yahoo’s main attraction. Instead of creating its own
content, it would lean on other media companies and
content generated by users.
after that, Braun left the company. He declined to be
interviewed for this story.
most recent attempt at entertainment media came after
Chief Executive Marissa Mayer joined the company in
revenue declining and mounting pressure from Wall Street
to show financial and user growth, Mayer implemented a
multi-pronged turnaround strategy that has included
workforce cuts; product launches; a revamped email app;
investments in mobile, social and advertising; and a
$1.1 billion acquisition of Tumblr.
key part of her strategy was a return to entertainment
hired news anchor Katie Couric on a $10 million-a-year
contract, secured an exclusive live-streaming deal with
the NFL and committed funding to original programming:
the revival of "Community" and two new series,
"Sin City Saints" and "Other Space."
year later, all three shows were canceled.
January, Yahoo shut down its video portal, Yahoo Screen,
and Mayer announced that the company was shifting away
from original scripted content.
Yahoo kept Couric, now on a $15 million contract, even
though its news website remained a hodgepodge of links
to other news providers.
it kept four digital magazines — with a focus on news,
sports, finance and lifestyle — while shutting down
the rest. It launched an e-sports portal this year.
insiders can point to a handful of smart bets the
company has made — an exclusive licensing deal with
"Saturday Night Live," NFL streaming, live
music streaming for instance. But its aversion to risk,
they say, meant it always pulled back before it could
Yahoo had this opportunity," Csathy said. "And
the world passed it by."