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SAN FRANCISCO—Yahoo
Inc. got back to business Tuesday, announcing its first
acquisition since Microsoft Corp. made its unsolicited
takeover bid for the Internet company.
Yahoo
bought Maven Networks Inc. for about $160 million to
expand its footprint in the online-video advertising
market, one of the battlegrounds with Google Inc. and
other rivals.
Maven,
based in Cambridge, Massachusetts, delivers video and
ads for more than 30 media companies, including News
Corp.’s Fox News, Sony Pictures and CBS Corp.’s CBS
Sports.
The deal
was announced one day after Yahoo rejected Microsoft’s
$44.6-billion takeover bid and after Microsoft announced
its 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 analyst Charles Di Bona
said.
Yahoo
wouldn’t say whether it paid in cash or stock.
Analysts
are still betting that Microsoft will succeed in its
quest to buy Yahoo, but the corporate mating dance
probably will last another few weeks. Analysts predict
that Microsoft eventually will increase its $31-a-share
offer.
Bill
Miller, fund manager at Legg Mason Inc., the
second-biggest shareholder in Yahoo, wrote in a letter
released Tuesday that he thinks Yahoo will have trouble
coming up with alternatives that could outmatch what
Microsoft will pay for the company.
Sunnyvale-based Yahoo has expanded its online
advertising network by buying such companies as
BlueLithium and Right Media. Research company EMarketer
Inc. expects online video to grow to $4.3 billion by
2011, from $775 million in 2007.
As more
people watch news, television and other entertainment on
the Web, major media companies have made online video
among their top priorities, said Will Richmond,
president of Broadband Directions.
“Video
is the fastest-growing segment of the online ad market,”
said Cheryl Kellond, Yahoo’s senior director of global
ad product strategy. “We expect it to constitute 20
percent of the online display advertising business in
the next three years.”
Maven
will operate as a Yahoo subsidiary.
“We are
going to continue focusing on the same business we have
been pursuing, but we are going to do it on steroids as
part of the Yahoo family,” said Maven chief executive
Hilmi Ozguc, who founded the 5-year-old company.
With its
large Internet audience, relationships with media
companies and advertisers and growing ad network, Yahoo
jumped to the top of the list of potential buyers, he
said.
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’s 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.”
In
December, nearly 141 million US Internet users watched
more than 10 billion videos, according to research
company ComScore Inc. Google, which outmaneuvered Yahoo
to buy video-sharing site YouTube in 2006, captured the
largest audience with 79 million viewers. In terms of
the number of videos watched, Google had nearly a third
of the market; Yahoo had 3.4 percent. (Los Angeles
Times) |
