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What's Behind Marissa Mayer's Hiring Spree at Yahoo?


Katie Couric is the latest journalist to be scooped by the company.

Yesterday, Yahoo (NASDAQ:YHOO) officially announced that it had hired ABC journalist and television personality Katie Couric as a so-called "global anchor," continuing its series of investments in journalism and original content. According to Marissa M's blog post on Tumblr, Couric will be tasked with "shooting features for our homepage," as well as generally being "the face of Yahoo News."

Despite the much ado about Couric switching to Yahoo the move does have some precedence. In 2011, Yahoo and ABC signed a deal to share news content, reporting resources, and original video. And Couric's daytime Web show, Katie's Talk, is available on both ABC and Yahoo. Though Couric will give up her position as a prime-time host for ABC, she will continue to host her daytime talk show on the network.

Of course, the Couric acquisition continues a long line of similarly high-profile poaching. In September, Yahoo News named Megan Liberman, formerly the Deputy News Editor at the New York Times, its Editor-in-Chief. In October, tech columnist David Pogue, longtime writer for the New York Times, announced he would be leaving the paper to start a consumer-centric tech site for Yahoo. Earlier this month, star political writer Matt Bai announced he would also be leaving the paper to take a position as political columnist for Yahoo. Now Couric joins the list.

Why is Yahoo investing so aggressively in journalism? One reason: It is on trend. The higher-ups of Internet media have been seemingly scrambling to integrate star reporters and more traditional ways of reporting the news with the newest media platforms. Pierre Omidyar, the eBay (NASDAQ:EBAY) billionaire, is building a new site around Glenn Greenwald, the former Guardian US journalist who became noteworthy for his reporting on the Edward Snowden NSA leaks. ESPN was able to persuade Nate Silver, perhaps the most famous statistician in the world, to leave his post at the New York Times to build a presence at the world's biggest sports network.

But why does this trend exist? It all comes down to declining display-ad revenue. Globally, both ad sales numbers and the average price per ad are down. Since taking the reins at Yahoo in July 2012, Mayer has sought to drive up traffic with significant redesigns of the company's Web and mobile properties, as well as its logo, aiming to offset the decline in ad revenue.

According to Brian Solis, an analyst at Altimeter Group, Couric has experience creating news items that are targeted specifically to mobile, which he thinks may have been at least a small portion of her appeal to Yahoo. As he said in an interview with Mashable, "The two [Mayer and Couric] are going to really play to see if they can create news on demand, news to go, news that adapts to each of the screens. I could see Marissa creating a sales team and a set of products that will be native to each of those screens." .

Mayer has been vocal about the fact that she believes video content will be crucial for her business going forward. In addition to Couric, who will obviously be bringing premium video content to Yahoo, Mayer has invested not just in news. In April, she announced an exclusive deal to air all Saturday Night Live skits from the last 38 years on Yahoo.

Video is great, we all like to watch it, but is a major investment in premium content really going to work for Yahoo? Brian Weiser, an analyst at Pivotal Research Group, remains skeptical. He believes that ad revenue problems for big sites like Yahoo run much deeper than a lack of premium, original content. Instead, he sees falling ad revenue as the result of changes in the process of buying ads. These days, marketers are able to bid in real time for the best deals on ads, which tends to drive down the average ad price for large media companies like Yahoo.

As Weiser also told Mashable, "It's not clear to me that [Yahoo] appreciates the scale of the destruction that's wrought the industry. There are huge issues that are not going to be overcome by employment of a celebrity brand."

Whether Weiser is on to something or not, investors have been buying into Mayer's take on things. Since she joined the company last year, Yahoo's stock has appreciated 132.72%, though much of that increase is credited to Yahoo's purchase of Alibaba (OTCMKTS:ALBIY). Obviously, major journalists are buying into the Yahoo way of doing things, so much so that they have abandoned positions at leading news organizations. Now all we can do is stay tuned.

Follow me on Twitter: @JoshWolonick and @Minyanville
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