Yahoo! to Cut FinanceVision

Stung by the protracted downturn in online advertising, Yahoo plans to discontinue some of its streaming media content, once thought critical for the future of the company’s media revenues.

The decision, impacting Yahoo FinanceVision and Yahoo Radio, marks a retreat from a strategy set in motion through the 1999 acquisition of Broadcast.com, for which the Sunnyvale, Calif.-based portal paid $5.7 billion.

A Yahoo spokesperson said the move is “part of the company’s commitment to work towards long-term profitability and growth and focus resources on its core strengths.” The spokesperson added that the move wouldn’t affect the Yahoo ShoppingVision e-commerce site, nor the company’s B2B webcasting services, both of which use Broadcast.com technology.

The company originated FinanceVision in a bid to extend the format of financial cable television networks like CNBC and CNNfn to the Internet. In addition to streaming video of taped news anchors, Yahoo’s FinanceVision media player also simultaneously showed charts, related headlines, and static ads.

But the service’s main intent was to incorporate television-style ads into the stream. Such placements are thought to be more effective than static banners, enabling Yahoo to charge higher fees.

Yet insiders say the concept failed to catch on with advertisers because it lacked a critical mass of consumers, who for the most part seemed content to stay with the portal’s main, HTML-based Yahoo Finance site.

Because of the bandwidth needed to deliver the streams, Yahoo FinanceVision also necessarily was dependent on the growth of high-speed Internet access — a fact that ultimately proved a limiting factor as the rate of broadband’s rollout slowed following the dot-com bubble burst.

The move also scuttles Yahoo’s plans to expand its subscription-based Premium Services. The company hinted in the past that it intended to make FinanceVision part of its Premium offerings, while creating broadband-enhanced “Vision” versions of its other popular channels, such as Sports (resulting in “SportsVision,” for instance.)

Yahoo Radio, the other service cut in the reorganization, served primarily to stream live broadcasts from terrestrial radio. Now, however, it will be discontinued in favor of Yahoo’s LAUNCHcast service, acquired last year in the $12 million purchase of struggling Launch Media. At the time, Launch had been struggling to find advertisers for LAUNCHcast, which streams personalized music and video playlists.