Has Yahoo walked away from the Dailymotion deal? Might this be good news?

May 1, 2013
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The WallStreetJournal reported early this morning that Yahoo is no longer interested in the Dailymotion purchase. News of the potential deal began months ago with rumors, and as things progressed, it became more and more clear that the “international partner” that Orange was looking to offload its stake in Dailymotion on was Yahoo. This week, however, it seems that the deal hit a wall… but not just any way, a bureaucratic wall – the French government (who owns a 27% stake in France Telecom, the parent company of Orange, who owns a 100% stake in Dailymotion) stepped in on the deal and said “ah ah ah, you didn’t say the magic word.”

Arnaud Montebourg, the minister who is actually in charge of “fixing the economic mess we’re in” (officially, “Minister of Industry Renewal”), is reportedly the one who put the breaks on the deal, saying that Dailymotion was a gem, and he didn’t want to give a gem like that up to another US company – looks like Montebroug is a ‘control’ entrepreneur. We already spoke about the irony of wanting to keep a company and help it grow – the government is offering to put its sovereign wealth fund behind the video site.

What’s interesting is that, according to Numerama this morning, the government is still interested in talking with Yahoo; however, WSJ reported the deal was dead, according to Yahoo. Montebourg wants a partnership (i.e: a minority stake) that will help France’s big golden egg to prosper and spread across the world. In the end, it seems that Montebourg would rather that Orange own 100% of a company worth $300M than 25% of a company worth $2B (not even close to that value of YouTube). So it’s definitely not a money game for Montebourg, must be the old red white and blue pride that so many young entrepreneurs crumble under. Someone buy that man a copy of the Innovator’s Dilemma, Crossing the Chasm, and the Lean Startup, and let him know that, despite the fact that Dailymotion is well profitable, he may have just sentenced Dailymotion to a fate worse than death – mediocrity.

In the end though, maybe what France needs is a failure like this, a really bad breakup that will get mentioned for the next 10 years every time the government steps in: “hey, Government, you tried that last time and we lost the Dailymotion-Yahoo deal!” and of course, the government will say “oh, but you’re better without them,” and we’ll say “that’s not your call to make.” Setting a precedent for failure when the government steps in may be exactly what we need right now.