Because when you are sitting on a pile of internet money, and facing possible future irrelevance, it makes sense to splurge a bit on a “proof of concept” item, so that maybe you gain a toehold in the future.
Reader John Bragg helps me see the whole picture with this comment on my last post…
Yahoo is about where AOL was at the end of the 1990s. They’re sitting on a huge pile of tech-driven stock valuation, but they know that their core business has been overtaken and will be obsolete soon. Their search engine is a dinosaur, the only part of their business worth a damn is YAhoo Sports, driven by fantasy football.
So if they can get a piece of the watch-sports-on-the-web market, there’s some benefits there. (Can they get a slice, competing with ESPN3 and WatchESPN, MLBAM, and longer term with the watch-online sections of NFL.com, NBA.com, NHL.com? I doubt it)
So they’re scrambling to turn their temporary cash and stock-value into permanent value, AOL convinced Time Warner to hand over half of their company for magic beans, but Yahoo hasn’t found a similar pigeon.
Worse for them, their technology is poor. I’ve been watching, or trying to watch, Community on Yahoo Screen, and it’s terrible. Community is fine, but Yahoo Screen is terrible. The sound and video buffer and freeze at diferent rates, it’s not easy to pick the episode you want. And I’m not trying to watch Community at the same time that millions of others are watching.
The money is trviail for Yahoo–this is a proof-of-concept for getting them into the live-sports-internet business.
NOTE: I can’t comment on Yahoo’s streaming muscle – my internet is still too slow for even the slickest outfits streaming video services to be “seamless” – the AOL/Time Warner comparison does ring true. Let’s hope for my “partner company’s” sake, Yahoo!, that it works out.