Yahoo’s Internet radio service to be run by CBS
Yahoo Music, once the ace music destination on the Web, is handing over the bulk of its Launchcast Internet radio operations to CBS Radio. Under a deal closely resembling that between CBS Radio and Launchast rival AOL Radio, CBS Radio is stated to be taking over all advertising-sales operations, licensing and technology decisions for the Launchcast service. This would include replacing the Launchcast desktop music player with a co-branded one provided by CBS.
CBS also added that all of its Internet radio stations available through Launchcast, including webcasts of CBS’ terrestrial radio stations were simply its Internet-only feeds. On a positive note though, the CBS player will allow Firefox browser and Mac users to access Launchcast, something that wasn’t done previously. Yahoo Music head Michael Spiegelman singled out more expensive royalty payments, under the most recent Copyright Royalty Board rate structure, as key to the decision. Yahoo, according to Spiegelman will continue to program its own music channels, and will focus on developing open platforms that allow its users to embed music in community and social applications, including its Instant Messaging product.
Google Exits From Advertising Deal with Yahoo
Google Inc walked away from a proposed advertising partnership with Yahoo in the wake continuing pressure from government regulators as well as clients.
Google said in its corporate blog that it was pulling out of the advertising partnership deal with Yahoo as even after four months of anti-trust review, regulators and some advertisers continued to express concerns about the deal. Under the terms of the deal Yahoo would hand over a share of its advertising business to Google in exchange for a share of any resulting revenue. Google chief counsel, David Drummond said in a statement that pushing ahead with the deal would have meant incurring long expensive legal battles as well as soured relationship with clients.
The break up of the proposed advertising deal with Google has left Yahoo in a critical position as it struggles to hold on to its share of the growing market for search advertising on the Internet. The fruition of the partnership deal would have landed Yahoo with hundreds of millions in advertising revenue deal. Yahoo officials responded to Google’s exit from negotiations with disappointment and maintained that the partnership would have been lucrative for all parties.
However by Wednesday afternoon share prices of Yahoo rose by more than 4 percent on hopes that the company would now restart merger negotiations with former suitor Microsoft Corp.
Yahoo Might Cut Jobs to Save Costs
Yahoo! Inc, owner of the second-most popular search engine on the Internet, is exploring several cost saving options which might include job cuts affecting as many as a 1000 employees, reported the online edition of Bloomberg, citing people familiar to the matter.
Earlier this year, Yahoo! had rejected a takeover bid from software giant Microsoft Corp and is now reportedly taking the help of consulting form Bain & Co. to review its costs. Yahoo has been suffering from reduced revenues on its online advertising businesses as advertisers cut down on promotions in a slowing economy. This has prompted the internet company to go for substantial cost cutting measures.
While Yahoo! had 14,300 employees at the end of last year, the latest round of job cuts, would see as many as 1000 employees out of a job, revealed the source to Bloomberg on condition of anonymity since the discussions are private. The job cuts are expected to take effect from January next year. This is yet another example of how the recent financial crisis and the economic slowdown have affected even the non-financial service providers. According to Collins Stewart Plc, the online advertising industry stands to lose around $6.7 billion in business due to crashing credit markets as well as lesser spending capacity of financial and auto companies.
Yahoo Experiments with Small Changes on Front Page
With small steps at a time, Yahoo has undertaken what may be the largest overhaul of its home page in recent times.
Yahoo.com is most visited portal page on the Internet with over 100 million people from America alone, stopping by the site every month. A major revamp of a home page of such staggering popularity is fraught with enormous risks. If the changes do not meet the expectations of even a small proportion of Yahoo’s audience, the company stands to lose millions of users and several millions of dollars in advertising revenue.
This is the reason why the changes on Yahoo’s home page are being introduced in very small measures and to a small segment of its audience at a time. The company is also keenly awaiting feedback from its users on the changes that have been introduced in the front page. Eventually Yahoo intends to put up, several months from now, a completely different and presumably better home page without alienating any of its users with the impact of a sudden change. This form of stealth innovation is increasingly becoming common among the biggest Internet portals which face the challenge of introducing new features without putting off their loyal audiences by springing sudden changes on their sites.
Trouble insight for Google-Yahoo Deal!
The Association of National Advertisers (ANA) has sent a letter to Head of the antitrust division of the US Department of Justice, opposing the controversial Google-Yahoo search advertising deal.
Yahoo said that it didn’t have relevant ads for some keywords, and the result pages would not have any ads. As a result the company decided to allow Google to use some of the valuable virtual real-estate, in a revenue sharing model. At the same time Yahoo could also choose to place Google ads along-side its own. To put it simply all they are trying to say is that Google will be placing ads on Yahoo search result pages.
The ANA consists of a group of 400 powerful companies that spend a grand total of $100 Billion in advertising. In an official statement the association stated
“The letter, authorized by the ANA board, notes that a Google-Yahoo partnership will control 90 percent of search advertising inventory and states ANA’s concerns that the partnership will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search and advertising.”
The deal will give Yahoo an extra $800 million revenue in the first year, as a result boosting its cash flow to $450 million from $200 million. It was initially announced in June and the two companies said they will implement it after 100 days to give anti-trust regulators to review the deal.
Time will judge the fate of the deal and the fate of Yahoo, which needs the deal most.
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