A cornerstone of Marissa Mayer’s plan to turn around Yahoo is crumbling

Yahoo couldn’t figure out a way to make money off video.
Yahoo couldn’t figure out a way to make money off video.
Image: Photo by John Shearer/Invision for Sony Pictures Television/AP Images
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A year ago, when Yahoo was reporting its 2014 year-end earnings, CEO Marissa Mayer introduced a new catchall term for the company’s major growth areas: MaVeNS, which somewhat quizzically stood for mobile, video, native, and social. Collectively, these divisions were growing faster than any other part of Yahoo’s business, and they represented the company’s embrace of hip, new technologies.

Mayer might need a new portmanteau now. According to Variety, at the end of 2015, the company quietly shuttered Yahoo Screen, its video hub for original and licensed programming. Yahoo isn’t completely giving up on the medium, though—video will be folded into its “digital magazines” offering, playing a supportive role for its lifestyle content sites.

“At Yahoo, we’re constantly reviewing and iterating on our products as we strive to create the best user experience,” a spokesman tells Quartz. “With that in mind, video content from Yahoo as well as our partners has been transitioned from Yahoo Screen to our Digital Magazine properties so users can discover complementary content in one place.”

Mayer had aspirations for Yahoo Screen to compete against the likes of Netflix and Hulu. It produced original series, including Sin City Saints, and revived cult sitcom Community after NBC had canceled the show. It hired news anchor Katie Couric and recently renewed her contract for a reported $10 million. And besting its video rivals, it snagged the rights to stream a National Football League game globally—a first for the league—though the numbers proved disappointing.

The first signs that Yahoo’s video endeavors were flailing emerged in October, when the company revealed in its third-quarter earnings call that it took a $42 million “asset impairment charge.” Chief financial officer Ken Goldman said the writeoff was “related to a change in strategy of certain long-form video content,” before eventually admitting that ”we couldn’t see a way to make money over time.”

The decision to kill off Yahoo Screen comes as investors mount pressure on Yahoo to revive its lagging performance. Last month, Yahoo announced that it would attempt a complicated reverse spinoff to sell its core business—essentially making it a holding company for the 384 million shares it holds in Chinese ecommerce giant Alibaba. The original plan to spin off its 15% stake in Alibaba was scrapped when it became unclear if the transaction would go through tax-free.