Yahoo! takes a page from Hulu and YouTube

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Yahoo! (YHOO) may be looking with envy at the success of YouTube and Hulu, the two large video sites. It's not clear that either makes money, which may make them bad businesses for Yahoo! to emulate, but the portal wants to push up its video content anyway.

According to The New York Times, "Yahoo's executives say they have found a sustainable model for making original video online, in part by explicitly not competing with television." That means that the project will offer products unlike Hulu, which carries a lot of full-length TV shows and movies, and unlike YouTube, which gets most of its content from amateurs.

Yahoo! is looking at the other big video sites and seems prepared to take a middle route of video content that is "snappy" and short. Maybe people coming to Yahoo! want to spend three or four minutes looking at mini-shows focused on subjects that interest them.

What Yahoo! has to face is that it may be a long time before it can make any money on the project. The recession is undermining sponsorships for web video just like it is for display ads and search marketing. Spending money on launching new ways to capture online ad dollars advertising is sailing into a stiff wind.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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