Yahoo Wants to Seduce YouTube’s Biggest Stars

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Yahoo (NASDAQ:YHOO) has been working for many months on an online video service that could compete with Google’s (NASDAQ:GOOG) YouTube, and according to a recent report from Re/code, Yahoo has begun to poach YouTube’s talent to help it get there.

Sources familiar with Yahoo’s strategy told Re/code that the company is looking to lure away YouTube’s biggest talent with better pay in order to build the first real competitor to Google’s online video service. YouTube’s biggest stars and networks are being offered more money than Google pays to show their content on Yahoo’s service.

Re/code said that YouTube video creators have frequently complained about the low pay they receive from the company, and Yahoo is offering content producers either better ad revenue or guaranteed ad rates for their videos. Yahoo also plans to offer extensive promotion on its heavily trafficked homepage as well as the opportunity for producers to sell their own advertising.

Yahoo CEO Marissa Mayer has been working tirelessly to turn the company around after taking the helm two years ago. Mayer believes video can become a major part of those efforts. She even presented Yahoo’s second-quarter earnings last year in a video presentation shot like a news broadcast, saying she wants to make video a “primary area of investment over the next year.”

Mayer has put her money where her mouth is by hiring celebrity reporter Katie Couric as the company’s head anchor and investing in the archives of Saturday Night Live for the current Yahoo Screen video service. Couric’s show, Yahoo News with Katie Couric, premiered last month. Her first interview was with former New York City Mayor Michael Bloomberg, and leading up to the episode, Couric asked viewers to submit questions they’d like her to ask him via social media.

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