Yahoo and the Future of Web Content Creation

May.19.10 | About: Yahoo! Inc. (YHOO)

Yesterday Yahoo! (NASDAQ:YHOO) forked over $80-100M to acquire Associated Content.

The move signals a few things:

- It shows that how content is created is more valuable than the content itself (what the content is). It also drives home the point, much to the chagrin of the establishment, that who created the content is almost irrelevent.

- As well, it marks off the last chapter of the text content creation debate (which shall end when Demand Media files for an IPO), opening the debate on how one can successfully and profitably scale video content creation efforts, which takes us, of course, to WatchMojo.

With May being a profitable month for us, it’s too early to tell if we can remain in the black for good, but with 5,600 videos in our catalog and nearly 150,000,000 all time video views, it’s worth stressing that neither Demand Media nor Associated Content have successfully cracked the video market.

In fact,

- Demand Media’s eHow is largely user-generated content which advertisers continue to shun.

- Associated Content has the platform for text, but when it comes to videos, it has hitherto aggregated videos via Grab Networks.

- Aol is a work in progress, at best.

No one has managed to scale content production profitably the way we have. Admittedly, we’re still small in many ways… but if we can replicate what we’re doing at larger scale… then that bodes very well for our future.