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Yahoo! stakes out new territory in Hollywood

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But it's a herald of what could come. A growing number of amateur "podcasters" are broadcasting audio shows on topics ranging from music to cooking to political discussions over the Internet for iPod users to download at their convenience. Surely, frustrated directors will do something similar when video technology catches up.

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"I'd be shocked if there weren't a breakout scripted series that existed only on the Web in the next couple of years," says John Battelle, a founder of Wired magazine. "There's far too much talent not getting its notice in Hollywood."

While Yahoo! says it has no plans to go that far yet, it has been eager to dip into the entertainment world for years. Its CEO, Terry Semel, spent 24 years at Warner Bros. before making the switch to Silicon Valley. And last year, Yahoo! hired Lloyd Braun, former cochairman of ABC Entertainment Television Group, to head its media division. Now, the Media Group is moving entirely to the new Yahoo! Center.

Santa Monica "is a much better position to establish and build relations with the media and to attract the best and brightest talent," says Joanna Stevens, a Yahoo! spokeswoman. "We will be working with partners to define what the next generation of media content is going to look like."

Along the way, it could also define what the next generation of media company looks like. It is clear that Hollywood is in no hurry to embrace the Internet.

"It's a clash of open versus closed," says Mr. Battelle. Almost all media companies say, "We own the environment - it's our walled garden and everything that goes on inside we control," he adds. "But that's not how the Web works. All the control is at the point of the consumer."

Yahoo! is positioning itself to be the largest media venture that fundamentally understands this mentality - and how to profit from it. "Yahoo! comes out of this ethos," says Mr. Saffo. "It understands that this is a two-way conversation."

What, exactly, Yahoo! will become is still a mystery. Perhaps it will spread out from its Internet base across various media from magazines to TV. Perhaps it will make local TV stations irrelevant, acting as a national distributor of Hollywood fare over new high-speed Internet lines. Perhaps it will become an ABC of its own, producing programs that viewers stream onto their living-room TVs.

Much depends on the how the technology develops, and how fast. But few doubt that the Internet will eventually play a major role in the future of entertainment. To many, today harks back to the beginning of cable TV, when possibility took form in hundreds of channels waiting to be filled. In coming years, the possibility could be as limitless as the Internet itself.

"There was a lot of hit and miss in the early days" of cable, says Phil Leigh of Inside Digital Media in Tampa, Fla. "It's going to be a lot like that. It will be an evolutionary process."

[Editor's note: The original version failed to acknowledge that the Monitor has a content licensing arrangement with Yahoo!]