Yahoo reportedly in discussions with Orange to buy big stake in Dailymotion

Mar 20, 2013
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Yahoo is reportedly in talks with Orange to buy what could potentially be a big stake in Dailymotion. According to sources familiar with the discussions, Dailymotion may be valued at as much as $300 million and Yahoo could ultimately buy up to 75% of the French online video site  This move by Yahoo would help them gain a stronger presence in the online video space, particularly in Europe and Asia, and would be Marissa Mayer’s first acquisition as new CEO. According to Les Echos, Orange declined to comment on the situation.

Dailymotion has had a bit of a bumpy ride since they started out. Founded in 2005, which was incidentally the same year as Youtube, Dailymotion achieved a respectable level of success in France as well as a few other markets, including Turkey where they actually surpass Youtube. However, despite their efforts, they haven’t yet been able to transition themselves into a credible rival for Youtube. In addition, their partnership with Orange has been up and down over the years with Orange originally purchasing 49% of Dailymotion for €66 million (with an option to buy the remaining shares), then Dailymotion looking for a US buyer for the remaining 51% but coming up empty, and, finally, Orange biting the bullet and taking full ownership by buying the remaining shares earlier this year.

It’s a safe bet to assume that if there is a deal underway, both Dailymotion and Orange are for it. Orange never seemed quite sure what to do with Dailymotion either as minority or outright owners and Dailymotion, who for years have aspired to becoming a major player in the States, prefered a US buyer or partner anyway. To top it off, if the rumor is true that Yahoo’s offering to buy a big stake at a $300 million valuation for the video site, this is a significant premium over the estimated €100 million valuation early this year. So, it looks like the deal would be a big win for the Orange-Dailymotion tandem, but its less clear as to whether it would be one for Yahoo.

This story was originally covered in the Wall Street Journal and picked up in Les Echos,