Today: Yahoo and Microsoft look to offer original programming similar to Netflix and Amazon. Also: Technology stocks' downfall continues.
The Lead: More tech companies eye original television programs as path to growth
As technology companies look to disrupt the traditional model of video delivery through cable companies, original programming continues to be the hot target, with Yahoo and Microsoft the latest large tech companies to reportedly look to expand their offerings of proprietary television programs.
The Wall Street Journal reported Sunday that Yahoo is looking to produce big-budget television comedies, a step up from the shorter Web series on which the Sunnyvale Internet company has previously focused. That kind of move would put Yahoo in competition with Netflix and Amazon, which have already put forth original TV programs similar in production to traditional content producers such as HBO and AMC.
"They're looking at the same type of shows that Netflix and Amazon are eyeing," an anonymous "person familiar with the situation" told the Journal about Yahoo.
Not to be outdone, Microsoft has six shows prepared to launch that will stream through the tech firm's gaming consoles, Bloomberg News reported Monday, including comedy offerings from Seth Green and a team of Sarah Silverman and Michael Cera and a science-fiction show about robot workers who appear human. The Washington tech giant also has a dozen other shows in development under former CBS executive Nancy Tellem.
"We aren't trying to find something that's going to be accepted by the largest common denominator, which is what a lot of people in the business look for," Tellem told Bloomberg. "We're focused on what we feel our audience on our platform wants."
If the companies succeed in offering high-quality original programming over the Internet, they would join Los Gatos video-on-demand company Netflix, which has a growing lineup of lauded original programs including "House of Cards" and "Orange Is the New Black," and Amazon, which produced "Betas" and "Alpha House" and has several other programs in development as it launches a gadget that will beam those and other streaming options to users' television sets. While Google has not invested in its own original programming, the Mountain View search giant has made moves to support more and better produced programming on its leading online video site, YouTube.
Original video programming can generate buzz for a company as well as help drum up advertising, an area in which Yahoo could sorely use a boost as Google and Facebook trounce the former leader in online ads.
"Netflix has proven that a high-quality program can attract a large amount of viewers and with Yahoo's large installed base of users, this kind of original content could be a very important part of any growth strategy," Creative Strategies analyst Tim Bajarin told MarketWatch.
"Yahoo needs to attract and keep users on site and loyal, and original TV programming is one of the newer techniques in use by technology companies to attract valuable engaged users," Gartner analyst Brian Blau noted. "TV content compliments other efforts by the company, especially in advertising where a full featured offering can be very attractive to advertisers who want to spread their investments in marketing across channels such as digital, TV, web and mobile."
Blau noted to Bloomberg, however, that it is a very hard game to win.
"Building a TV studio is just as hard as a building a game studio -- every piece of content is a potential hit. Every piece of content is a potential miss and until you have a number of hits under your belt, you aren't a player," he said.
Yahoo dropped 3.5 percent Monday to $33.07, its lowest closing price of the year, while Microsoft fell 0.2 percent to $39.80. Netflix gained 0.2 percent to $338 and Amazon declined 1.6 percent to $317.76.
SV150 market report: Technology stocks' decline is the worst in three years
Wall Street's recent slump continued Monday, and tech stocks continued their decline into a bear market as the tech-heavy Nasdaq composite index suffered the largest percentage decline on a day when all three major U.S. stock indexes fell more than 1 percent, completing a three-day drop that is the Nasdaq's worst since 2011. While several former high-flying Silicon Valley stocks suffered further declines, losses were not as widespread as last week, with the SV150 also falling 1 percent.
Two of Monday's largest declines in the SV150 belonged to the region's solar companies: Solar installation company SolarCity plunged 8.1 percent to $54.30, its lowest closing price of 2014 that is 38.6 percent lower than the San Mateo company's peak price; and San Jose solar-panel manufacturer SunPower dropped 6 percent to $30.06, 19.1 percent lower than its 52-week high. The only other company in the SV150's cleantech sector, Tesla Motors, dropped 2.2 percent to $207.52, officially pushing the electric car maker into bear market territory, defined as a 20 percent decline from the company's peak price. SolarCity faces a prolonged court fight with the federal government, and Tesla was sued Monday by a Wisconsin man known as the "Lemon Law King."
Apple sank 1.6 percent to $523.47 as the company's court battle with Samsung continued Monday in San Jose, with the iPhone maker calling experts to testify about its rival's alleged patent violations. Twitter fell 1.6 percent to $42.45 as the San Francisco company acquired an Android-focused mobile company called Cover, and rival Facebook gained 0.4 percent to $56.95 after the Federal Trade Commission accused Jerk.com of illegally capturing Facebook's data on users. Zynga dropped a penny to $4.19 despite a vote of confidence from Wedbush Securities analysts, and Google declined 0.9 percent to $540.63 while signing a licensing deal with Mountain View neighbor Room 77 for a more robust mobile travel-booking option. Intel gained 1.2 percent to $26.49 after an upgrade from Pacific Crest Securities, part of a wave of bullish notes on chip companies, and then announced after the bell that it will change its financial reporting standards to reflect its shift to the mobile sphere.
Up: Intel, Symantec, Cisco, VMware, Yelp, Facebook, Nvidia, Netflix, Hewlett-Packard, Gilead
Down: SolarCity, SunPower, Pandora, Sandisk, LinkedIn, Yahoo, NetApp, AMD, Workday, Intuit, Tesla, Juniper, eBay, Twitter, Apple, Adobe, Oracle, Applied Materials
The SV150 index of Silicon Valley's largest tech companies: Down 14.86, or 1.02 percent, to 1,446.16
The tech-heavy Nasdaq composite index: Down 47.97, or 1.18 percent, to 4,079.75
The blue chip Dow Jones industrial average: Down 166.84, or 1.02 percent, to 16,245.87
And the widely watched Standard & Poor's 500 index: Down 20.05, or 1.08 percent, to 1,845.04
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.