Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Yahoo Tries Yet Again With Original Editorial Content

Posted by Tom Foremski - April 26, 2010

Mike Shields at MediaWeek reports:

Yahoo is on the verge of hiring more traditional journalists as it plans to aggressively beef up original content for its top verticals, including news, business and entertainment.

...That identity has already begun taking shape as Yahoo has hired a handful of journalism veterans to expand on Yahoo News, including former WashingtonPost.com editor Russ Walker, the site's new politics editor; Andrew Golis of Talking Points Memo, who is assembling a team of news-hungry bloggers; and ABC News veteran Anna Robertson, now Yahoo News' director of multimedia and social media.

Foremski's Take: This isn't the first time Yahoo has tried to build an in-house editorial team producing original news content. For example, it used to have a large business news group, with its own TV studio producing financial news throughout the day. That was an expensive venture, one that got dumped entirely when the dotcom boom turned bomb.

Yahoo then tried again. It hired Patrick Houston in May 2005, former CNET editor-in-Chief, as VP of Content and Programming. Mr Houston built a content division with original stories in tech gadgets and tech news.

I remember sharing a taxi with Mr Houston in New York and asking how things were going. He said things were great but he worried that Yahoo management didn't understand the cost of original editorial.

He was right because in February 2008, Yahoo gutted the media group and Mr Houston went on to join Netshelter Technology Media.

It looks as if Yahoo is trying again, but again, it will run into the same problems: having to justify the high cost of editorial content in a world where the economics of original content is defined by companies such as Demand Media and Associated Content, which can determine the lifetime earnings of any piece of content using an algorithm.

When Yahoo needs to cut costs, editorial costs will always look more expensive than running software and servers.

And that's the problem with trying to build news businesses within businesses that don't understand the costs of producing original news.

And that's why Google will never acquire a newspaper such as the New York Times. That would be a disaster because Google knows how to manage servers and software, it doesn't know how to manage newsrooms.

Yahoo, again, faces the same challenge. Will it again, face the same end game?


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