Yahoo Strikes Deal With ABC For Online News Content

SUNNYVALE (CBS/AP) - ABC News and Yahoo Inc. are joining to deliver more online news to their audiences. With the deal, ABC News content will be prominently featured on Yahoo News, the most visited news website in the world. It will also show up on Yahoo's popular front page.

The partnership comes as a growing number of people turn to the Internet for news and other information. The two news organizations have a combined online audience of more than 100 million users per month in the U.S.—something ABC News president Ben Sherwood noted was "the size of the Super Bowl audience."

While, the deal helps ABC grow its online reach, Yahoo News can drive further traffic to its own site by featuring original, made-for-online content. ABC is launching Web-only news series, starting with a live interview with President Barack Obama by George Stephanopoulos Monday afternoon. That launches a series, "Newsmakers," with online interviews conducted by the likes of Diane Sawyer, Barbara Walters, Katie Couric, Robin Roberts and others.

Couric said the deal offers an "incredible opportunity to do extended interviews" and delve deeper into subjects without the constraints of "TV time."

Both companies will maintain editorial control of their own content.

Yahoo and ABC News have already had agreements to share content online, but the companies say the latest venture goes deeper than that. Sherwood called it a "game-changing day" for ABC News.

Outside of Monday's announcement, there hasn't been much reason for fanfare at Yahoo lately. The company has struggled to grow advertising revenue in the last few years, in part, because of competition from Google and Facebook. The company fired its CEO, Carol Bartz, last month, and is trying to decide whether to sell all or at least part of the company.

Colin Gillis, an analyst with BGP Financial Partners said Yahoo's alliance with ABC "is not going to fix Yahoo's problems." Gillis noted: "This is a relatively small event in the broader ecosystem of what is going on with Yahoo."

Yahoo's problem, Gillis believes, is that "it doesn't have a strong voice for a lot of its content," the way AOL has Huffington Post, for example. So the ABC deal will help the company share some of ABC's news brand. But Gillis pointed out that Yahoo's bigger issue is its leadership void.

"No major deal is going to get done until that void is filled," he said.

Though the quality of its journalism is well-regarded, ABC News has suffered from a business standpoint during the past decade because it doesn't have a regular cable partner, the way NBC News has MSNBC and CNBC. The tight relationship with Yahoo could give the network a chance to step beyond that weakness. ABC is owned by The Walt Disney Co.

"This is about the networks of the future," Sherwood said. "This is about how people get their news and information from different networks, whether it's on television, online, on mobile devices, on tablets and, quite frankly, in ways that we haven't even thought of yet."

As part of the deal, ABC and Yahoo will work together to sell advertising. ABC will sell online ads during the spring "upfront" season, when advertisers bid on commercial time for next fall's TV season. Yahoo will take care of sales during the rest of the year.

Executives would not disclose how the companies would share revenues created by the venture. Levinsohn said Yahoo has already heard from advertisers and agencies looking to be part of new programming created for the Web.

Sherwood and Levinsohn are both new in their jobs, having taken over leadership roles in their companies over the past year. Sherwood said they have known each other for a while through past digital ventures and began talking about ways to work together as soon as they began in their new positions.

Also part of the deal, Christiane Amanpour will have a Web-only series discussing the top international stories of the day and "Nightline" anchor Bill Weir will do a weekly series on innovations titled "This Could Be Big."

ABC will work together with Yahoo on political coverage heading into the election year, he said.

ABC already contributes video streams to Yahoo's news sites, but the deal deepens the relationship with far more content and makes ABC the top news source on the Web site, executives said.

"To be able to go deeper with this array of talent at ABC News is a big statement for us," said Ross Levinsohn, executive vice president of the Americas at Yahoo.

Shares of Yahoo rose 81 cents, or 6.2 percent, to $13.98 in morning trading. Investors were buying the shares after the CEO of Chinese Internet company Alibaba Group Holding Ltd. said he would be "very interested" in buying Yahoo.

Year-to-date, Yahoo shares are down about 16 percent.

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