Yahoo Entertainment Properties Hit Hard In Big Layoff-Reorganization?

One would guess that the big Yahoo layoffreorganization includes a culling of some the company’s weaker properties — and yes, we’re hearing today that this includes Music and possibly Movies, popular sites that don’t monetize well.

Word has been leaking out since last week, when Digital Music News wrote a well-sourced article that didn’t make the situation sound good. “Will there be a music-dot-yahoo-dot-com?,” it quoted one person as saying. “Yes. But will it be integral to the future success to Yahoo? No. Has the traffic been good? No. Has this content been consistently interesting to advertisers? No.”

We hear that this is correct — Music is going to be a shell of itself if it is not shut down completely. Its leaders are in the process of being let go, and aren’t being replaced, we’ve confirmed with a source. Music had around 25 million monthly uniques as of the end of last year, according to comScore.

A similar fate could be happening to other Entertainment properties, including Movies, another source says.

Update: “There’s absolutely no truth in the rumor that Yahoo Music is closing,” a spokesperson says, which isn’t exactly a rebuttal of this article. “Entertainment still continues to be a big focus for Yahoo.”

Ross Levinsohn, the newly-installed director of the widespread media division that includes these sites, is most interested in video, a third source adds, as it is better able to attract advertiser interest. Indeed, Yahoo’s sites have been able to produce a total of nearly 61 million U.S. unique visitors in February, according to comScore — a distant but still significant second to Google. There’s recent growth to add to the story, powered by the ABC News partnership.

More broadly, portal-driven sites like these have been supplanted over the years by social networks — first Myspace (which Levinsohn knows all about as he bought it for News Corp), then Facebook — and now mobile apps.

Yahoo has been plugging away at its music service for more than a decade and the rise and decline of that business is a cautionary tale in its own right. Yahoo first got its hands on the property back in 2001 when it bought Launch Media for $12 million. It added to that with a further acquisition: music playing, downloading and digitizing service Musicmatch, reportedly bought for $160 million.

Yahoo eventually branded the combined service as Yahoo Music in 2005. But with monetizing proving elusive for the service even then, when it was ranking as the web’s most popular music site, in 2008 it shut down the on-demand part of the business (Yahoo Music Unlimited) and signed a deal with Rhapsody to provide those services. The Rhapsody deal is still in place today.