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By Alexei Oreskovic
SAN FRANCISCO, June 20 As Marissa Mayer
approaches her one-year anniversary as chief executive of Yahoo,
she's hewing closely to the struggling Web portal's traditional
advertising model--and eyeing more video programming of every
stripe as central to the strategy.
"We're working on various methods in terms of how we can
increase our video views, and watching," Mayer said at the
Reuters Global Technology Summit on Thursday. "It's clear to me
that our video business is something that's growing a lot. It's
something that we'd like to accelerate."
Yahoo is currently bidding to acquire Hulu, the online hub
for TV programming owned by Walt Disney Co and News Corp
, sources with knowledge of the situation have told
Mayer would not comment on the bid for Hulu.
The Web pioneer was looking at buying French video site
DailyMotion but had to abandon the effort after objections from
the French government.
Yahoo also has a growing menu of original video
programming, such as the critically-acclaimed Burning Love TV
reality show spoof, and it recently acquired the rights to the
archive of Saturday Night Live television programs.
Online video commands higher ad rates than other types of
Web content and has become a fiercely competitive arena as it is
increasingly viewed as a bulwark against the steady decline in
prices for online display ads.
On Thursday, Instagram, the mobile photo-sharing app owned
by Facebook Inc, introduced a new feature that allows
users to create 15-second videos. Facebook itself is reported to
be readying an online video ad format. Google Inc's
YouTube, the world's No.1 online video destination, is expected
to generate $5 billion in revenue this year, according to RBC
Mayer took the top job at Yahoo after a tumultuous period in
which the company had churned through several CEOs and many of
its top executives and engineers jumped ship.
She has revamped key products such as mail and the Yahoo
home page, implemented morale-boosting measures like free food,
and jumpstarted acquisitions. On Thursday, Yahoo closed its $1.1
billion acquisition of Tumblr, a blogging service that is one of
the Web's most popular hubs of user-generated content.
Yahoo's stock has surged roughly 70 percent since Mayer
became CEO. But Wall Street analysts say much of the gain has
come from stock buybacks and from Yahoo's Asian assets,
including a 24 percent stake in Chinese e-commerce giant and
potential IPO debutante Alibaba Group.
PEANUT BUTTER AND JELLY
Yahoo's biggest near-term goal and most important yardstick
by which to measure its progress will be the rate of increase in
the amount of time users spend on its websites, Mayer said.
"Yahoo's ability to generate revenue for a thousand pages is
reasonably good," Mayer said. "The challenge for Yahoo at the
moment is traffic. How do we grow traffic? How do we gain usage?
Because that ultimately will drive up revenue."
While rivals such as Google have experimented with new
revenue streams, including subscription music services and
online retailing, Mayer said Yahoo remains squarely focused on
"I believe in ads, I like ads. We may try some other things
but Yahoo is an ad company," Mayer said, but added that it does
not mean Yahoo will cut on its own original programming.
The company's headcount has decreased by about 1,000
employees during her first year, through a combination of
attrition and ramped-up performance management, with staffers
now getting reviewed on a quarterly basis instead of every year,
But Mayer said the company was aggressively pursuing new
talent: job applications recently peaked at 10,000 a week, more
than twice the level of a year ago.
At the same time, Mayer has moved to cut back the thickets
of bureaucracy that she said had sprouted across the company
over its 18-year history.
Mayer installed a system called PB&J, short for Process,
Bureaucracy and Jams. That has eliminated roughly 700 irksome or
unnecessary procedures within the company, such as forcing
employees to undergo a special orientation for the company gym.
"I understand that we are geeks and we may not be that
coordinated but I think we can all figure out how to use a
treadmill without an orientation," Mayer said.
Some industry-watchers assumed the PB&J moniker was an
homage to the so-called "peanut butter manifesto," in which
former Yahoo executives warned of problems plaguing the company.
Mayer said the real story was much simpler.
"Most days for lunch I have a peanut butter and jelly
sandwich," she explained. "So sitting there I was like 'Can we
call it something simple and fun like PB&J?' And we kind of
backed into process, bureaucracy and jams. But it works."
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(Additional reporting by Poornima Gupta and Edwin Chan. Editing
by Jonathan Weber and Edwina Gibbs)