Yahoo in talks to buy majority stake in video site Dailymotion

By on March 20, 2013, 11:30 AM

Yahoo is reportedly in talks to purchase a controlling stake in online video website Dailymotion. The Internet pioneer could be prepared to buy up to 75 percent of the company as part of an ownership structure according to people familiar with the talks as reported by The Wall Street Journal. The acquisition would be the first major move under CEO Marissa Mayer since taking the position last year.

Buying a controlling stake in the site, which is believed to be valued around $300 million, would allow Yahoo to gain a wider audience with regards to online video in certain parts of Asia and Europe. Yahoo might have an option to buy the remaining stake in the site at a later date but one of the sources said the deal isn’t imminent and could still falter.

The move seems like a good fit for Yahoo, as Mayer has stressed in the past the importance of investing in overseas markets. During an analyst conference last month, she said one of the challenges was that Yahoo is primarily domestic and they don’t have enough of the business running from an international basis. More than 70 percent of the company’s annual revenue comes from the Americas with most of that share originating in the US.

Based on unique viewer count, Dailymotion is the 12th largest video website in the world. The site pulled in 116 million uniques in January according to data from comScore. The site doesn’t have a huge following in the US but is very popular in countries like Turkey and France. The two companies signed a deal just last year to syndicate videos on Yahoo’s websites.




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Julio Franco Julio Franco, TechSpot Editor, said:

If Yahoo goes for it, evidently Mayer as an ex-Googler knows how important YouTube was for the company and is looking into building a direct competitor, of which there are none at this point.

danhodge danhodge said:

If Yahoo goes for it, evidently Mayer as an ex-Googler knows how important YouTube was for the company and is looking into building a direct competitor, of which there are none at this point.

Which would of course be great!

Although I would actually say that Facebook is now kind of a competitor, as people tend to upload videos there regularly.

Staff
Julio Franco Julio Franco, TechSpot Editor, said:

I can partly agree. Facebook users tend to share videos with their social network a LOT, but because of the walled garden, FB can't compete directly. Also, when was the last time you saw a viral video originated on Facebook? It's all YouTube on that end as well.

danhodge danhodge said:

I can partly agree. Facebook users tend to share videos with their social network a LOT, but because of the walled garden, FB can't compete directly. Also, when was the last time you saw a viral video originated on Facebook? It's all YouTube on that end as well.

It tends to be chains of viral videos. Like 'The Cup Song', or the Harlem Shake videos. But I do agree, it doesn't have an impact which comes anywhere close to YouTube.

My question is, do you think anyone could compete with YouTube? A lot of major markets like this are hard to break into (like social networks), but I would say this is even more difficult than that. So many people make their money (or a fraction of it at least) through YouTube, and I don't really think that they would risk that on a much smaller site.

The only way it could successfully compete in my opinion is if Google carry on changing the site around every week, and people start actively looking for a more solid replacement.

1 person liked this |
Staff
Julio Franco Julio Franco, TechSpot Editor, said:

Certainly, unless a market shift took place that put YouTube at a disadvantage (nothing that can be foreseen for now), competing at the same level will be extremely hard. But then again there are only a handful of players strong enough to make a dent, whether it's Microsoft, Amazon, Facebook, and few others.

Generally speaking I wouldn't count in Yahoo, but with Mayer at the helm, maybe she knows better being a long-time Googler and all. Yahoo is still an extremely popular destination and if they acquire the necessary technology so they don't have to build it from the ground up, who knows...

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