How people watch television is changing, but its more than just a shift from
cable to streaming services. People literally are doing more while they watch. A
recent Nielsen study found that 70% of tablet owners and 68% of smartphone users
use their devices while watching television. Why arent more companies looking to
capitalize on the new second-screen experience? Many arent. But Yahoo (NASDAQ:
YHOO ) is, and its recent acquisition IntoNow is giving Yahoo a leg up in what
could be a lucrative new stream of advertising revenue. Heres Yahoos plan for
making money on second-screen viewing: The new IntoNow app for Apple s (NASDAQ:
AAPL ) iPad listens to what youre watching on TV and automatically loads
relevant content on the tablet. If youre watching Monday Night Football ,
IntoNow brings up player stats and commentary. If youre watching the news,
IntoNow trawls Yahoos news database and other sources on the net to bring up
other stories related to the current subject. Providing parallel content to the
audience is an effective sales tool just look at Amazon s (NASDAQ: AMZN )
success with its Recommendations back in the 90s and its common in television.
Netflix (NASDAQ: NFLX ) and many other services track users viewing habits and
make automatic content suggestions based on that information. IntoNow is
something else entirely, though, creating a whole second stream of content for
the audience that lures them in using the same principle as recommendations. The
audience, then, can see multiple advertisements simultaneously . IntoNow is a
dream product for a company whose $1.62 billion display advertising business is
outpaced by Facebook . The IntoNow app is an exciting product for Yahoo. It is
arguably the first unique product the company has offered in a decade, and if
its successful, that innovation could restore investor confidence in the company
and give Yahoo new, much-needed direction. IntoNow already has strong partners
looking to make unique content for the service. Pepsi (NYSE: PEP ) built a
campaign for the IntoNow iPhone app a social networking app that lets users
check in online to tell friends what theyre watching in April, giving away a
coupon when the app recognized the audio from a televised Pepsi commercial. The
app also fits into Yahoos larger push in television. Despite a rocky year, Yahoo
scored key partnerships for its Yahoo TV Internet television service, namely
Disney (NYSE: DIS ). The Yahoo TV software also comes prepackaged in televisions
made by Sony (NYSE: SNE ), Vizio and Samsung (PINK: SSNLF ). If the IntoNow iPad
app gets unique content when paired with Yahoo TV-equipped televisions, Yahoo
will find itself in an enviable position in the budding Internet television
market, in addition to cornering the still-new second-screen market. Of course,
the risk for Yahoo is that the IntoNow app is an excellent idea that is easily
imitated and thus will be quickly devalued. Apple is said to be preparing its
own line of HD televisions for release in the next year, and given that companys
new emphasis on audio recognition technology and the popularity of its tablet
and smartphone, its hard to imagine it wont provide an alternative. The same can
be said of Google (NASDAQ: GOOG ) and Microsoft (NASDAQ: MSFT ), whose Google TV
and Xbox TV projects also are likely to interact with their respective mobile
platforms, Android and Windows Phone 7. But just because these other companies
can adopt similar technology as IntoNow doesnt necessarily mean that they will .
Time will tell. But for now, Yahoo seems somewhat revitalized thanks to the
forward-thinking IntoNow. Now, Yahoo has to figure out how to keep it unique and
at its most profitable before its competitors catch up. As of this writing,
Anthony John Agnello did not own a position in any of the stocks named here.
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