The acquisition comes a day after the search giant rejects Microsoft’s takeover bid…
“Fresh after rebuffing Microsoft’s $44.6 billion purchase bid, Yahoo Inc. bought online-video technology provider Maven Networks for $160 million…”
San Francisco — Yahoo Inc. got back to business, announcing its first acquisition since Microsoft Corp. made its unsolicited takeover bid for the Internet Company.
In the midst of trying to fend off Microsoft’s $44.6 billion takeover bid, Yahoo on Tuesday said it has acquired “Maven Networks Inc.,” for about $160 million, boosting the Web portal’s footprint in the fast-growing online video advertising market, one of the battlegrounds with Google Inc. and other rivals.
Maven, based in Cambridge, Mass., delivers content and ads to more than 30 media companies, including Fox News, Gannett, The Financial Times, Hearst, E.W. Scripps and CBS Sports. Maven does not sell ads, but is heavily involved in testing new ad formats that go beyond the typical clip that runs before the video.
“The deal was announced a day after Yahoo rejected Microsoft’s unsolicited takeover bid and after Microsoft announced its own purchase of Danger Inc., a Palo Alto company that makes software for mobile handsets.”
“You have got to keep going with your business or you cripple yourself,” Sanford C. Bernstein & Co. analyst Charles Di Bona said.
The deal will help Yahoo and its network of Web partners deliver video to sites and sell advertising within and around the clips, in a challenge to the Internet video advertising being offered by larger rival Google Inc. through its site YouTube.
The acquisition lifts Yahoo in the online video market by taking it closer to more media companies, some of which are already Yahoo partners. Hearst and Scripps, for example, are members of Yahoo’s classified advertising network of newspapers.
Yahoo says it has video advertising relationships today with more than three-quarters of the “top TV advertisers,” and also has partnerships with a number of “premium publishers,” including eBay, Comcast, Newspaper Consortium, and Forbes.com.
Yahoo said it intends to offer publishers the option of letting Yahoo handle ad sales as part of Maven’s offerings. For advertisers, Yahoo plans to also offer search and display ads.
“Video is projected to be the fastest growing segment of the online ad market, and Maven will significantly help advance Yahoo’s strategy, expanding the video opportunity for publishers and increasing the efficiency and effectiveness for advertisers,” Hilary Schneider, executive VP for global partner solutions at Yahoo, said in a statement.
“This deal really creates one of the most robust video platforms in the industry,” added Schneider.
Maven, specializes in online video publishing, syndication and, most importantly, advertising. The start-up bills itself as being “synonymous with Internet television.”
“When I co-founded Maven Networks it was with a singular vision that video would be critical to the future of the Internet,” Hilmi Ozguc, CEO of Maven Networks, wrote in a posting on his company’s website on Tuesday.
“The combination of Yahoo and Maven Networks paves the way for the creation of even more advanced video content monetization and distribution capabilities for media companies and advertisers worldwide.”
Yahoo says it bought Maven to improve content and advertising in online video services provided by the Sunnyvale, California, firm.
Yahoo will use Maven to expand both its video and video advertising offerings, the companies said. Maven competes in a crowded field against other Internet TV firms such as Brightcove, Extend Media, the Platform and others. Online video experts have been predicting some consolidation among platform providers.
Yahoo said it has the largest library of professionally produced and legally licensed video content. The company also boasts video-ad relationships with more than 75% of the top TV advertisers. With the acquisition, Yahoo gains access to Maven’s customer base of more than 30 major media companies, including Fox News, CBS Sports and Scripps Networks.
“Yahoo said it will work with Maven to offer more inventories and ad formats.”
“By combining our capabilities with Yahoo!’s own technology resources, publisher and advertiser relationships, and vast audience reach, we will deliver an unmatched video content syndication and advertising solution to the market,” Ozguc, said in a statement.
Yahoo’s failure to date to compete effectively with Google in the online ad market has been a major contributor to its low stock price, which led to the recent takeover bid by Microsoft.
Last year, Yahoo bought online advertising exchange Right Media for $680 million in response to Google’s plans to buy Internet advertising company DoubleClick.
As more people watch news, television and other entertainment on the Web, major media companies have put online video among their top priorities, said Will Richmond, president of Broadband Directions.
In December, nearly 141 million U.S. Internet users watched more than 10 billion videos, according to ComScore. Video lovers watched an average of 3.4 hours of video during the month, representing a 34% gain since the beginning of 2007. The average online video lasted 2.8 minutes, and the average viewer watched 72 videos.
Maven raised about $30 million in funding from Prism Venture Partners, Accel Partners and General Catalyst Partners. The 70-employee company was early in the online video market, which has become increasingly crowded as funding flows to start-ups.
“It is a transaction that makes a lot of sense for both parties,” Richmond said. “It gives Yahoo a premier content-management publishing and advertising technology platform for broadband video — something it can marry very easily to its large audience base, advertiser base and media partner base. It gives Maven access to a vast number of advertising and media relationships.”
Analysts are still betting that Microsoft will succeed in its quest to buy Yahoo but expect the corporate mating dance to last a few more weeks. They predict that Microsoft eventually will increase its $31-a-share offer.
“In video advertising, as in Web search advertising, Yahoo is playing catch-up to Google.”