Paramount, Yahoo Strike Portal's First Content and Ad Sharing Deal

Staff Reporter

Having established a Southern California beachhead in Santa Monica last year to build its entertainment industry ties, Yahoo Inc. has struck its first content and advertising sharing agreement with a TV show.

Terms of the deal with Paramount Studios-produced "Entertainment Tonight" were not announced, but Yahoo and the weekday entertainment news show will cross-promote each other and share the program's video feeds.

The deal reflects the trend of Internet companies seeking new and inexpensive ways to bring content to their sites while boosting visibility and ad revenue. For the TV show, the deal broadens its access to the Internet audience.

"The TV space is growing for us and we are working closely with networks on the editorial side," said Jed Rosenzweig, director of production at Yahoo Entertainment, headquartered in Santa Monica.

"It was a way to leverage what each one of us does," said Michael Mischler, executive vice president at Paramount Domestic Television. "We have all this great content and they have this incredible distribution machine on the Internet."

As Sunnyvale-based Yahoo's advertisement-based revenue model came crashing down after the tech bubble burst, a new emphasis was placed on increasing the value of the portal and establishing more traditional content relationships.

Much of that impetus came under the leadership of former Warner Bros. Chairman Terry Semel. Yahoo's stock had dropped from $240 a share in January 2000 to $11.38 in April 2001, when Semel was hired to lead it in its search of new revenue streams.

Since then, Yahoo Entertainment has landed deals with Paramount's UPN, Fox, The Discovery Channel and USA Network, which like "Entertainment Tonight" are seeking new media channels in which to promote themselves.

"Yahoo Entertainment's advertisers are not your dot-com advertisers. They are traditional advertisers," said Rosenzweig, who declined to discuss how advertising packages would be sold between "Entertainment Tonight" and Yahoo.

Other major TV networks and Internet sites have established partnerships as well. MSN, Microsoft Corp.'s online content portal, has partnerships ESPN and "Access Hollywood" that give it live interviews and movie trailers.

"More people are understanding the power of the Internet in helping to get TV viewers to make decisions," said Nancie Martin, senior vice president of new media at the WB Network, the television unit of Warner Bros. The WB Network provides promotional content for its shows to several Internet partners, including Yahoo and America Online.

The Yahoo and "Entertainment Tonight" deal was established after the two tested the cross-coverage concept during the March Academy Awards telecast. "Entertainment Tonight" promoted Yahoo's Web coverage, which included real-time winner lists, breaking news and photos, while Yahoo promoted the television coverage on its site. The result was the highest rated Oscar coverage ever for both companies, said Rosenzweig.

Beginning this week, the show's weeknight program will be mirrored by Yahoo's online coverage, called "ET on Yahoo Entertainment." The relationship will also include coverage of eight major entertainment events each year, including the Emmy Awards and "Entertainment Tonight's Fall TV Preview."

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