Yahoo Inc. this week will begin showing news clips supplied by 16 CBS Corp. television stations scattered across the country, providing the Internet's most trafficked Web site with another online video magnet.
The deal with the CBS-owned stations to be announced Monday comes a week after Google Inc., one of Yahoo's biggest rivals, grabbed center stage in the booming online video market with its $1.65 billion acquisition of YouTube Inc. That 20-month-old startup has become a pop culture sensation by serving up a mix of homemade and copyrighted clips.
Although Yahoo also offers a section for homemade videos, it has relied primarily on deals with major media companies to attract viewers.
Yahoo already shows national and international news from CBS's "60 Minutes" as well as Walt Disney Co.'s ABC and Time Warner Inc.'s CNN.
The latest deal will allow Yahoo to post 10 to 20 local news clips from each of the CBS-owned TV stations covered in the exclusive arrangement. The stations encompass the nation's largest metropolitan markets.
The daily clips be available on Yahoo's news site beginning Tuesday. In return for access to the clips, Yahoo will share an undisclosed portion of the advertising revenue generated by the videos — a major lure for TV stations as they try to follow their audience to the Internet.
Yahoo's reliance on video from established TV networks has caused some Internet industry observers to question whether the Sunnyvale-based company is being too stodgy in its approach. YouTube and other online video upstarts are thriving by giving Web surfers a chance to watch and rate a potpourri of amateur clips.
"Yahoo almost seems to be telling people what they should be watching instead of letting them make their own choices," said Dmitry Shapiro, chief executive of video startup Veoh Networks.
The formula has worked well for Yahoo so far. Just under 38 million people in the United States streamed videos at Yahoo in July, ranking just ahead of News Corp.'s MySpace.com and YouTube, according to the most recent data from comScore Media Metrix.
Google ranked a distant seventh with 7.5 million people in the U.S. streaming videos from its sites. The gap separating Mountain View-based Google from the video leaders drove the Internet search leader to buy YouTube.
News videos have been particularly successful at Yahoo. The company said more than 50 million new clips were streamed through its Web site last month, up from 3.5 million a year ago.
The CBS stations will feed news coverage to Yahoo from these metropolitan markets: New York (supplied by WCBS); Los Angeles (KCBS); Chicago (WBBM); Philadelphia (KYW); San Francisco (KPIX); Boston (WBZ); Dallas (KTVT); Minneapolis (WCCO); Miami (WFOR); Denver (KCNC); Sacramento, Calif. (KOVR); Pittsburgh (KDKA); Baltimore (WJZ); Salt Lake City (KUTV); Austin, Texas (KEYE); and Green Bay, Wis. (WFRV).
Yahoo intends to seek news video agreements with other TV stations in markets that aren't covered by the CBS agreement, company spokesman Brian Nelson said.