REPOST: Why Yahoo Hired Katie Couric

Katie Couric is now Yahoo’s global anchor. What this means for the tech company’s recent efforts to boost its media content is explained by Mashable’s Seth Fiegerman in the article below.  

Image Source: mashable.com

For years, Yahoo has struggled with whether to define itself as a media company or a technology company. When Marissa Mayer was hired as CEO in mid-2012, some assumed it was a decisive verdict in favor of the latter, considering her technical background at Google and the fact she beat out Ross Levinsohn, who firmly focused on the media strategy. Mayer, however, was quick to throw cold water on this assumption.

"It's not the right question," she said in one interview the day her hiring was announced. "The most important thing is to give end users something valuable, inspiring and delightful that makes them want to come to Yahoo every day.”

Perhaps in that light, Yahoo's announcement Monday that it had hired Katie Couric shouldn't come as too much of a surprise. She just happens to be the biggest hire yet in Yahoo's recent efforts to double down on media content, with other gets including New York Times tech columnist David Pogue and Times Magazine writer Matt Bai.

Yahoo gave Couric the impressive-sounding but vague title of global anchor and she will be tasked with "shooting features" for the Yahoo homepage and serving as "the face of Yahoo News." In Mayer's words: "At Yahoo, we are investing in bringing our users the absolute best content and video experiences available — and this is just the beginning!"

So what's really going on here? A source familiar with Yahoo's thinking told Mashable that the company isn't trying to create some alternative version of a traditional TV network. Instead, Couric's hire is part of Yahoo's continued emphasis on "original voices," both on camera and in print, which are intended to help attract more viewers, and ultimately advertising, to the site.

Yahoo's core problem has been (and continues to be) the decline in its display ad revenue. Since taking over as CEO, Mayer has pushed to redesign the company's various web and mobile properties in the hopes of driving up traffic and ultimately offsetting some of that decline in ad revenue. Mayer likely had something similar in mind when hiring Couric.

Image Source: mashable.com

Brian Solis, a principal analyst with Altimeter Group who has worked with Couric, notes that the anchor has experimented in the past with creating news items targeted to specific mobile platforms, which may be part of her appeal to Yahoo.

"The two are going to really play to see if they can create news on demand, news to go, news that adapts to each of the screens," Solis told Mashable. That, in turn, will give Yahoo more premium content with a big name attached, which it can convince advertisers to sell ads against. "I could see Marissa creating a sales team and a set of products that will be native to each of those screens," Solis said.

During a recent earnings call, Mayer alluded to the need to invest more in video content, pointing to efforts like Yahoo's exclusive deal for Saturday Night Live content. "Our video inventory sells out months in advance, which is not a good thing," she told investors in July. "We are working hard to drive traffic and video views and will make this a primary area of investment over the next year."

Whether this strategy of hiring big names and getting exclusive content in any way helps the downward trend in display ads is another matter. As Brian Wieser, an analyst with Pivotal Research Group, points out, Yahoo's problem on the ad front isn't necessarily a lack of premium content, but rather the rise of programmatic buying, which lets marketers bid in real-time for the best deals, effectively driving down average prices for companies like Yahoo.

"It's not clear to me that [Yahoo] appreciates the scale of the destruction that's wrought the industry," Wieser told Mashable. "There are huge issues that are not going to be overcome by employment of a celebrity brand."

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