Yahoo Seeks Spotlight in Hollywood

Watch out, Hollywood. There's a new player in town.

Yahoo Inc., the Internet portal created a decade ago by a pair of Stanford University computer geeks, is getting serious about muscling in on the entertainment business.

In fact, Yahoo has already arrived -- physically at least. The Sunnyvale, Calif.-based company signed a huge lease last month to take over most of the former headquarters of Metro-Goldwyn-Mayer Inc. in Santa Monica, which will soon be known as Yahoo Center.

Lloyd Braun, a veteran TV executive, will run the new division, Yahoo Media Group, that will be based there. He plans to move some employees from Silicon Valley and aims to poach Hollywood talent to build a media powerhouse.

"It's the way people must have felt at NBC in the late '40s or early '50s," Braun said recently. "You really have an opportunity to have an impact on an exciting, vibrant, exploding medium."

Countless dot-coms, including Yahoo, tried, and failed, to break into show business in the late 1990s. This time Yahoo has a running start: Over the last couple of years, the company -- which has 165 million users and $3 billion in annual advertising revenue -- has become a valuable partner in Hollywood, publicizing TV shows on its websites in cross-promotional deals with studios and producers.

Yahoo's ambitions are much bigger than that. The firm is experimenting with putting original entertainment on its sites and is trying to sell talent agents and producers on the idea of creating short, Internet-ready programs specifically for Yahoo.

Headed by Chief Executive Terry Semel, a former movie mogul who still lives in Los Angeles, and entertainment industry veterans including Braun, Yahoo sees itself following the path of television networks like MTV, which built its business promoting the music industry through videos before it began bankrolling its own shows, such as "Beavis and Butt-head" and "The Real World."

"I think Yahoo will follow that pattern fundamentally," Semel, who was co-chairman of Warner Bros. for five years and a top executive there for two decades, told investors at a conference last month.

Yahoo -- which attracts users by serving up news stories, sports scores, movie trailers, Web search and e-mail all in one place -- faces fierce competition in its pursuit of Hollywood. Rivals include not only Time Warner Inc.'s America Online Inc., Microsoft Corp. and Google Inc. but also the online businesses of the media companies that Yahoo plans to challenge for viewers and advertising dollars.