July 17 (Bloomberg) -- Yahoo! Inc., which named Google’s Marissa Mayer as its new chief yesterday, is pushing for a larger share of the online video audience with “Electric City,” an animated sci-fi series featuring Tom Hanks.
Produced by Hanks’s Playtone and India’s Reliance Entertainment, “Electric City” tells the story of a futuristic, dystopian society through 20 five-to-seven minute episodes, starting today at Yahoo Screen.
For the company, the second-largest U.S. Web video provider, the series marks a high-profile bid to improve its standing as an original producer and close the gap with Google Inc. and its YouTube unit, the Web video leader. Mayer, 37, will be charged with helping the company regain the attention of Web audiences who have shifted to competitors.
“They’re figuring at some point they actually attract new users who say, ‘This Tom Hanks thing is worth giving a shot. It’s on Yahoo? Well, I didn’t realize that was an option,’” said James McQuivey, an Internet analyst at Forrester Research in Cambridge, Massachusetts.
Video clips, with fashion advice, celebrity gossip, sports and financial news, have become a focus for Sunnyvale, California-based Yahoo, the world’s most popular Web portal, as it looks to replace revenue lost to Google and Facebook Inc.
Interim CEO Ross Levinsohn had pointed to deals with Walt Disney Co.’s ABC News and the Spotify Ltd. music service as growth opportunities.
“Eighty-five percent of Internet users watch videos,” said Erin McPherson, Yahoo’s vice president of video programming. “We need to be at the center of that.”
Yahoo fell 0.6 percent to $15.65 yesterday in New York. The company reports second-quarter results today after markets close. “Electric City” will air at screen.yahoo.com, home of the company’s entertainment programming.
In addition to the 90-minute story, “Electric City” will offer viewers character bios, an interactive map where they can follow the action, and links for posting comments on social networking sites while watching on a multiscreen format. Along with Hanks, an Academy Award winner, the cast includes Jeanne Tripplehorn and Ginnifer Goodwin.
Rather than releasing episodes one at a time over several weeks, Yahoo is putting 10 episodes out the first day and the rest over the next two days. The effect is that of a three-day television miniseries, McPherson said.
“Electric City won’t have any ads. Instead, Yahoo is acting as the sole sponsor. ‘‘Cybergeddon,’’ a program planned for later this year, will be sponsored by Symantec Corp.’s Norton anti-virus software.
Advertising associated with online videos, at less than $4 billion a year industrywide, remains a fraction of the $60 billion-plus devoted to TV networks, McPherson said.
‘‘The ad dollars have yet to come,’’ she said. ‘‘We’re still in the early stages.’’
Yahoo isn’t the only Internet company turning to A-list entertainers for original online programming. Netflix Inc., the subscription video service, is producing five original series, including ‘‘House of Cards’’ with Kevin Spacey. Sony Corp.’s Crackle online unit will carry a Web series from Jerry Seinfeld starting this month. YouTube is spending about $100 million to develop original videos with partners such as Disney.
The number of videos watched online in the U.S. climbed 14 percent in the past year to 36.6 billion in May, according to researcher ComScore Inc. Yahoo ranked second with 57.7 million video viewers in May, behind Google Inc. and its YouTube unit with 151.6 million.
‘‘Electric City’’ was shopped to other firms before being picked up by Yahoo, McPherson said. She declined to reveal terms of the deal. Financing is from Reliance Entertainment which is also releasing mobile games based on the characters.
Ben Schachter, an analyst with Macquarie Securities in New York, said Yahoo has held early leads in other businesses, such as e-mail, and its financial results have still disappointed. Yahoo’s sales last year fell to $4.98 billion, down 30 percent from their 2008 peak of $7.21 billion, as the company lost ad revenue to Google and others.
‘‘I think given the history of the company, people need see them actually execute on a strategy, not just talk about it,’’ Schachter said.