How badly does Yahoo want other publishers to join its fledgling sales alliance with Microsoft and AOL? So much so that it’s holding content distribution deals over the heads of some prospective partners, while looking to entice others with the promise of getting their content on Yahoo’s traffic-heavy homepage.
For example, multiple sources say that Yahoo is using a not-so-subtle reminder it could choose to license competing content as a way to pressure existing content partners, including companies like The Weather Channel, Reuters and ABC—as well as several local media providers—to join the sales alliance. For example, the conversations have reportedly gone something like this: "It would be a shame if The Weather Channel decided not to join our sales alliance. We might be forced to shift to Weather Bug as our preferred forecast provider."
On the flip side, Yahoo executives are said to be offering noncontent partners the chance to cut editorial distribution deals in exchange for joining the sales alliance.
No publishers have admitted to joining the alliance thus far, and Yahoo executives declined to comment on negotiations. But it’s worth noting that newly christened Weather Channel CEO David Kenny is on Yahoo’s board of directors. In addition, ABC News and Yahoo recently entered into a major content partnership. Both companies will surely be under pressure to get on board.
According to sources, Microsoft and AOL are not employing the same tactics as Yahoo. Officials at Yahoo declined to comment, but one media insider wondered whether this hardball approach was approved by Ross Levinsohn, Yahoo’s evp of the Americas, and whether it's being championed by Jim Heckman, Yahoo’s svp of strategy and emerging businesses. A controversial figure, Heckman is known as the driving force behind the alliance. When Yahoo acquired his company, 5to1 Holding Corp., for $25 million last year, the deal was said to bring with it commitments from more than 20 partners, companies that would eventually form the basis for the portals to enact a sales alliance. None has surfaced thus far.
Some in the industry might see Yahoo's direct pressure on partners as just tough business negotiations. However, others see this approach as a sign that Yahoo is struggling to get other Web publishers interested in joining forces. It’s also not completely clear just where the portal sales partnership stands at the moment. The three companies planned on selling their joint inventory pools by “early 2012.” But some top buyers say they’ve yet to hear from the respective parties. According to some industry insiders, the three portals may be waiting to firm up more partners before pushing the partnership. A rep from Yahoo characterized the sales process as “in progress.”