The story is this: Yahoo vs. The New York Times . . . or any major newspaper, for that matter.
The most visited Web site has steadily morphed from an online directory/search service into a newspaperlike content provider.
Eventually, the story line likely also will be Yahoo vs. broadcast media, but for now word content carries the day online.
Yahoo has hired its own exclusive columnists and writers to cover sports, personal finance and the Iraq War, and to provide movie reviews. The firm has also linked with other content publishers to supply its site with news and commentary.
The latest example is Yahoo's pairing earlier this month with Gawker Media, which brings blogs covering politics, gossip and gadgets to Yahoo's pages.
Yahoo is no longer merely a starting point for finding another destination. For many, it's become their first and last stop on the Web, says Charlene Li, an analyst for Forrester Research.
"They are becoming a model for what a media company needs to be in order to be competitive in the future," she said.
More people are finding more news and information online than offline, says Gerry Davidson, a Nielsen/NetRatings analyst. And Yahoo is adapting. "You want to keep people on your site," he said. "You want to be the place to go for your online users."
Shifting Readers
Newspapers, too, are trying to adapt. Traffic to newspaper Web sites rose 11% from a year ago to 39.3 million unique visitors in October, says Nielsen/NetRatings. Paid circulation at almost all of the nation's largest newspapers fell in that time.
The New York Times' Web site, NYTimes.com, topped all online newspaper sites in October with 11.4 million visitors. That's up 15% from a year earlier.
But Yahoo, which through a spokesman declined to comment for this story, dwarfs all rivals in online news viewers. In October, it had 25.3 million visitors, up 16.6% from a year ago. That's 2 million more than No. 2 MSNBC.
CNN, AOL News and Gannett (GCI) newspapers rounded out the top five news sites, says Nielsen/NetRatings. Google, (GOOG) the Web's No. 1 search engine, is Yahoo's main rival in search. But not when it comes to news. Google News ranked 14th, with 7 million visitors.
Yahoo took a step further into the media world in September, when it hired journalist Kevin Sites to provide video and news reports from Iraq, a feature Yahoo calls "In the Hot Zone."
That and other exclusive reports could be helping the company drive traffic to its news pages, says Greg Sterling, an analyst for the Kelsey Group. "Original content is more desirable than something more generic or something that can be found elsewhere," he said.
'Positioned Well'
Yahoo's strong traffic in other areas also has helped it become the leading online news site. Consumers who come to Yahoo to do a product search or check the weather likely stop in at Yahoo news, says Davidson. "There's a lot of competition from the standard news sources," he said, "but Yahoo is positioned very well."
Yahoo's content offerings run across the board.
On Yahoo's health page, medical doctors provide information on such subjects as losing weight and the causes of sleepwalking.
Yahoo's movie page features a nonexclusive column by Nell Minow, the "Movie Mom," who reviews films and gives opinions about what new releases are suitable for kids.
Search alone isn't always enough to compete on the Web, says Jonathan Hurd, an analyst for consulting firm Adventis.
"You need to have some sort of anchor content – ideally exclusive or somehow differentiated – to drive traffic," he said. "That's the direction they're going in."
In September, Yahoo added 10 columnists to boost its personal finance page with exclusive reports. For example, well-known finance author Suze Orman writes a "Money Matters" column. It gives people tips on how to better manage their money.
Several people in the Internet field say rumors persist that Google will launch its own personal finance page. A Google spokeswoman, though, says the company has no such plans.
Unlike Yahoo, Google doesn't provide any of its own content – yet. Analyst opinion differs, but some expect Google to enter the news content fray.
It and other Web companies will follow Yahoo's example of adding often-unique content to attract Web users, says Adventis' Hurd.
"We'll see all of the major portals, including Google, increasingly have content and other services to create a broad set of customer experiences," he said. "It's a direction that they will all start to move to because it's a model that has worked in the offline world."
Google will face challenges, though. For one, the company depends on search ads for roughly 95% of its revenue. Yahoo has more revenue sources and offers more types of ad options.
More than that, loading Google's site with original content could detract attention from its search service, says Kelsey Group's Sterling.
"Google is not going to get into the game of producing original content," he said. "They are all about organizing the world's information, and the world's information is not Google's."
