Yahoo closes online video hub in retreat from effort to compete against Netflix, YouTube
SAN FRANCISCO – Yahoo pulled the plug on an online video hub that had once been envisioned as the beleaguered company’s answer to Netflix and YouTube.
The end of the Yahoo Screen is part of a purge being directed by CEO Marissa Mayer with hopes of generating greater profit elsewhere.
Mayer oversaw an overhaul of Yahoo Screen 16 months ago that came in the form of a new mobile application, thousands of clips from NBC’s “Saturday Night Live” and a wide variety of other popular TV shows.
But Yahoo Screen never attracted the vast audiences that flock to Netflix and YouTube.
Yahoo is now scattering its video across its digital magazines and other services, such as Yahoo Music.
“We’re constantly reviewing and iterating on our products as we strive to create the best user experience,” Yahoo said in a printed statement.
Mayer has pledged to jettison technology that fails to justify the amount of money that Yahoo has been investing in them.
Yahoo telegraphed that its video expansion was faltering in October when it disclosed a $42 million charge to account for original shows, such as “Community,” that had flopped.
Mayer is expected to provide more details about her latest plans for reorganization in about three weeks when the Sunnyvale, California, company announces its fourth-quarter results.
Industry analysts are expecting the steepest decline in Yahoo’s revenue, after subtracting ad commissions, since the company lured Mayer away from Google to become its CEO three-and-a-half years ago.
Shares of Yahoo have fallen by about 35 per cent since the end of 2014 as the difficulty of reviving company revenue growth has become evident, and that has increased the pressure on Mayer to take more drastic measures. There have even been calls for Yahoo to sell all of its online operations, but Mayer and the company’s board have rebuffed those demands to far.
By building a compelling video hub, Mayer had hoped to lure advertising away from Google, whose operations include YouTube, and social networking leader Facebook, which also boasts millions of clips shared by its users.
Yahoo’s stock gained 64 cents to $32.04 Tuesday afternoon.
© 2016 The Canadian Press