December 17, 2004
Welcome to Yahoo! (Nasdaq: YHOO ) , the home of comedy on the Web.
The Web giant hasn't yet won the right to make such a claim, but may be heading down that path. A Wall Street Journal article says that the firm has gained exclusive rights to distribute online animation company JibJab's next two video shorts. JibJab is best known for its "This Land" video that caricatured President Bush and Senator Kerry during the presidential election. Viewers called up that short and its sequel about 80 million times, according to Reuters.
The deal is another tangible sign that Yahoo! is exploring a different strategy than Google (Nasdaq: GOOG ) and other search-based outfits. Yahoo! continues to try to keep the pace by matching the technology tools offered by competitors and improving its existing offerings, although the firm has frequently been behind Google in rolling out innovations. But lately, more of the focus seems to be on content. Rather than treating content as a commodity, Yahoo! appears willing to craft deals in order to get rights to certain offerings, particularly online video. The company's biggest agreement in this regard has been its deal with Mark Burnett Productions to air exclusive excerpts from The Apprentice, the hit TV show on General Electric's (NYSE: GE ) NBC.
Arrangements like those with JibJab may make more sense for Yahoo! than glomming onto TV shows, however. The Web is a unique medium with its own peculiar strengths and weaknesses, so what works on TV doesn't necessarily work online. What's more, the Web outfit is better served in the long run by establishing its own brand of entertainment, rather than acting as TV's ugly stepchild. JibJab has proven that it understands how to reach and entertain Internet users, making it an ideal partner for Yahoo!
As for generating revenue from content deals, Yahoo! clearly has a plan. Unlike TimeWarner's (NYSE: TWX ) AOL unit, which asks users to pay for the exclusive content found on its network, Yahoo! will seek out advertisers. For firms trying to connect with customers, JibJab's ability to generate 80 million viewings will be hard to ignore.
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Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.