Here's Why Marissa Mayer Is About To Spend ~$200 Million On A YouTube Wannabe
Stephen Lam, Reuters
We cannot confirm that the deal is done – but we can say that two separate sources, one, close to
Which left us asking: Why is Yahoo buying an also-ran YouTube clone?
One answer is that it fits into Marissa Mayer's big picture content strategy, as relayed to us by another source recently briefed on it.
Her plan: reduce Yahoo's original content costs to "essentially nothing," do lots of partnerships with outside media brands, buy up as much user-generated content as possible, and then offer a personalized experience for the consumption of it all.
Not everyone loves this plan. Especially the part about reducing original content costs to "essentially nothing."
As one recently departed Yahoo executive put it: "Marissa may be a product genius, but Yahoo as it stands at the moment is an ads-for-content company, and she has shown no sign of recognizing that or valuing the profitable, good content businesses. I just don't get why you would destroy your functioning content businesses while doing a major revamp of the tech side. Why not revamp mail and search and apps and leave the cash-delivering content businesses alone? At least until the big stuff is accomplished."
Love the plan or hate it, it's easy to see how the
But there's also a much simpler explanation for the deal.
Yahoo's advertisers want to buy video ads. As things stand right now, Yahoo doesn't have that much video inventory. Buying Dailymotion gets Yahoo a lot more.
According to ComScore, Yahoo is the fifth most popular video site in the US, and the eighth most popular in the world.
Google and Facebook are number one and number two in both categories.
When Yahoo takes control over Dailymotion, it will nearly double the size of its video audience worldwide – from 119 million to to 230 million.
In the US, Dailymotion will propel Yahoo into a near tie with Facebook for second place, with ~60 million video viewers.
That's a lot of pre-rolls featuring LeBron James and the latest Samsung phone. Get enough of those, and Yahoo's top line will start to grow for the first time in a while.