I'm ready for my closeup: Yahoo's push into big media

It's official. Katie Couric is a Yahoo.

Mayer announced Monday that the former ABC News personality will join Yahoo, with the title of "global anchor." The announcement follows hints of the move stretching back to this summer that ratcheted up with a flurry of reports in recent days.

The move is perfectly aligned with chief executive Marissa Mayer's apparent vision for the company.

Under Mayer's leadership for more than a year, Yahoo initially emphasized businesses like mail, search, and other tech-focused products getting a fresh coat of paint, as well as making a bigger push in mobile. Mayer's most headline-grabbing move since taking up the CEO post in Juy 2012 was the $1.1 billion acquisition of Tumblr.

But how much of that broke new ground? Many of the efforts effectively dusted off Yahoo products that had grown musty after years without a dedicated refresh, and even the purchase of Tumblr smacked of a Internet old-timer grasping at the shiniest thing fascinating young people at the moment. Combined, they were Mayer's blitz to turn Yahoo into a stronger competitor to Google and Facebook for advertising dollars.

Now, with the hiring of Couric and David Pogue, Mayer is spelling out how Yahoo will deliver on the mission she's been broadcasting as Yahoo's fundamental goal: entertain us.

She's turning her attention to an ad realm that is growing more than any other, and, luckily for Yahoo, everyone is still trying to figure it out.

The first year
Yahoo's decision to bring in Mayer as CEO last year augured well for some promising elements of Google's cutlure to come with her. Yahoo stood to benefit by borrowing some of the search giant's dedication to engineering, swiftness and spirit of clear-eyed innovation that sparks extraordinary tech projects as easily as it kills off ones that aren't really working.

She had her work cut out for her. In the first quarter of that year, Yahoo's revenue rose a single percent to $1.07 billion, as a 4 percent decrease in display advertising revenue offset an 8 percent increase in search revenue. The company had moved rapidly through CEOs in recent years, including Carol Bartz, who was ousted as CEO in 2011 after less than three years of trying to turn around the company.

Mayer's first order of business was to improve Yahoo's core products. Search and Yahoo Mail got some much-needed attention, and Mayer stressed the need to make mobile the company's top priority. Then in May, Yahoo confirmed its $1.1 billion takeover of Tumblr, bringing Yahoo a younger demographic, and refashioned photo-sharing site Flickr after it lost ground to upstarts like Instagram.

In the process, Yahoo's media bent fell to the wayside.

That's entertainment!
In recent months, many of the rumblings at Yahoo have been in the realm of media and content. The high-profile poaching of Couric is just the latest example of Mayer's trying to bring the company into the bright lights. "At Yahoo, we are investing in bringing our users the absolute best content and video experiences available -- and this is just the beginning!" wrote Mayer, in a blog post announcing Couric's hiring.

Couric is best known for co-hosting the "Today Show" on NBC for 15 years before anchoring the "CBS Evening News" for five. Now, she hosts a weekday talk show on ABC, "Katie," and she will continue to front the show even with her new role at Yahoo. Couric will be "the face of Yahoo news" and shoot features for the company's homepage, Mayer said in the blog post.

The move comes after other splashy announcements the company has made in building out its team of media talent. In October, the company announced that David Pogue, the long-time The New York Times columnist, would join Yahoo to head up consumer tech coverage, writing columns and shooting online video.

AllThingsD has also reported that American Idol host Ryan Seacrest has also been in talks with Yahoo about content ideas. Seacrest's production company has apparently been discussing "interesting business opportunities" with the Sunnyvale, Calif.-based company, according to Kara Swisher. (For what it's worth, should Seacrest shoot any on-camera work for Yahoo, it wouldn't be his first foray into online video. One of Seacrest's first on-air gigs was for the little Web site you're reading right now.)

The stakes
Yahoo's partnerships with high-profile figures like Couric are mutually beneficial. While Yahoo may not be the peerless gateway to the Internet that it once was, the number of eyeballs that check it out is still profoundly big: 800 million users a month. Yahoo offers a huge audience and, under Mayer's watch, a significant amount of creative freedom.

The figures Yahoo has recruited are recognizable ones -- the kind of people with a built in base of fans that have already made following these people part of the "daily habit" that Yahoo so wants to be a part of. And much of this strategy revolves around short bites of shareable video.

Video advertising is the most promising ad market on the Web. Researcher eMarketer earlier this year forecast that video ad spending would more than quadruple from 2011 to 2017, making it the fastest-growing format of digital ads throughout that time period.

However, Mayer still has a lot to prove. Her strategy thus far has turned around a couple measurement of Yahoo's relevance -- traffic and stock price, as examples -- but Yahoo has yet to demonstrate clear momentum in revenue or profit. In the most recent quarter, the company posted GAAP revenue of a little over $1.13 billion, a five percent decrease from that time last year.

Video advertising on the Web is still burgeoning, and it works in Yahoo's favor that no one player has figured it out yet. Google may be the universal leader on search ads, for example, and YouTube has no peer in subscription-free online video, but it's still figuring out how to make money from video ads.

Others like Yahoo were wise to this opportunity already. AOL has been aggressively refashioning its video scope, another Web giant that is rebuilding itself after a slip from the Internet's pantheon. The company has been steadying its revenue by transforming to an ad-driven digital-media operation under Chief Executive Tim Armstrong, exemplified by last month's agreement to buy Adap.tv, a video-ad marketplace platform, for $405 million after a $315 million takeover of The Huffington Post in 2011. The company posted strong third-quarter earnings, with revenue of $561.3 million, beating Wall Street's estimates of about $549 million.

Like the rest of Yahoo under Mayer, it looks like her entertainment push is asking the world for wait-and-see.