Yahoo: Mark Koops, Katie Couric Great For Stock

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Jerry Yang, one of Yahoo's (YHOO) founders, leaves Yahoo earlier this year as many investors breathe easier. Yahoo was courted by Microsoft (NASDAQ:MSFT) four years ago to the tune of $45 billion. Jerry Yang apparently felt it was not enough at the time. Now Mr. Yang is pursuing other interests.

Yahoo recently lost other key senior executives and is laying off 2,000 employees. Scott Thompson, CEO, is actively structuring the company in a different direction. Analysts agree something needs to change. Yahoo traditionally is a culture of consensus. It is difficult to operate with committees that focus on monetizing an idea. It slows the process down. It is time to break out of the mold, open the way for more creativity, and allow some dissension in the ranks.

Other analysts feel Yahoo. needs to look at the sales organization and upgrade technology to more effectively meet the needs of its 700 million users. One way to monetize traffic might be through acquisitions of sites like TripAdvisor (NASDAQ:TRIP), Yelp (NYSE:YELP), HomeAway (NASDAQ:AWAY), Zillow (NASDAQ:Z), OpenTable (NASDAQ:OPEN) or StockTwits. Yahoo's traffic would enhance not only the user's experience but also the site numbers of all concerned.

Any of those mergers are in alignment with the new direction of the consumer commerce business unit. The new commerce business unit is focusing on delivering engaging and personalized consumer commerce experiences that connect consumers to marketers and merchants. Yahoo! has a tremendous opportunity to transform commerce on the internet.

Yahoo is proactive forming a new leadership structure and organizing itself into three main groups - Consumer, Technology and Regions. Yahoo's worldwide visitors during the first quarter grew 7% with time spent on various sites rising 14% in communications and communities and 8% in media areas.

First-quarter results indicate it was a wise decision on Mr. Yang's part to leave, at least for the company, and Thompson's restructure seems to be seeing results. Revenue was $1,077 million, a 1% increase from the first quarter of 2011. Net earnings increased 38% to $0.23 compared with $0.17 in first quarter 2011. Cash flow was $297 million, a 45% increase compared with $206 million for the same time frame in 2011. Free cash flow was $196 million for the first quarter, a 247% increase.

Forty million unique visitors come to Yahoo Finance for financial news and information every month. That is not where it stops. Yahoo is reconfiguring itself with its unique programming line-up. Yahoo is no longer just a search engine or information provider. Yahoo is tapping a wide range of offerings.

Yahoo debuted a variety of original comedy Web shows as part of a partnership effort between Yahoo and top production partners. It is teaming up with ABC as well producing several daily series. Yahoo and Disney's (NYSE:DIS) ABC News unit are developing a new online news program with Katie Couric. The show, aptly named Katie's Take, will be the first ABC News program with Couric at the helm.

Katie's Take will be one of the shows Yahoo debuts in the afternoon during its NewFront event. The move is seeking to capture TV advertising dollars and move them into the digital market. Yahoo is counting on the addition of traditional TV news vets like Couric and the ABC News team crew to add flavor and variety to its current content. Nestlé (OTCPK:NSRGY) is the launch sponsor. Yahoo is counting on other companies to see this as a good advertising opportunity.

Yahoo's video franchises include 15 original productions and over 40 original series, totaling more than 300 original episodes each month. The diverse portfolio includes branded entertainment. The Thread sponsored by Proctor and Gamble (NYSE:PG) receives over 3 million unique visitors a month. The Slates Channel has seen over 250 million streams to date. Yahoo is instituting new advertising opportunities with these new lineups. Advertisers can buy spots across all eight new Slate shows.

Yahoo also is in a unique position to offer new blockbusters of one-of-a-kind stories. Electric City is a new 90-minute sci-fi adventure series and Cybergeddon, a digital motion picture developed in partnership with Norton by Symantec, will bring to life the growing threat of cybercrime.

Yahoo is forming a partnership with Vuguru, an independent studio in Beverly Hills that finances world-class story-driven multi-platform content. Yahoo currently has 20 out of the 25 most watched online Web series and 35 million unique visitors a month that view original video programming. The partnership reaffirms Yahoo's commitment to being a leader in creating high quality content.

Media is changing and the advertising industry is looking for new ventures. Yahoo is poised to take advantage as this shift takes form moving toward the digital highway. Yahoo's original programming offers advertisers a unique buying opportunity to align its brands with premium content. With some creativity and innovation, advertisers can reach and engage digital audiences with streaming ads.

Even big producers are jumping on the bandwagon of digital streaming. Mark Koops, the producer of some of television's biggest hits, including the "Biggest Loser" and "American Gladiators," is joining the digital media frenzy making deals with YouTube and Yahoo.

Mr. Koops sees digital as a cost effective and efficient platform when compared with traditional television. He also sees it as a way to showcase new talent and businesses. The digital world is a place to explore creativity and open avenues of expression faster.

This could be just the turnaround Yahoo needs. As with any company, it is easy to get lost in one's past successes. To forget that tomorrow comes, is a definite killer of innovation. If Yahoo expects to remain a viable leader in the digital world then its new focus needs to remain in the forefront and be open to tweaking as the digital horizon evolves.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.