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

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

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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.

7 Responses

  1. Has Yahoo walked away from the Dailymotion deal? Might this be good news? – The Rude Baguette « Contacto Latino News

    […] Has Yahoo walked away from the Dailymotion deal? Might this be good news? – The Rude Baguette […]

  2. Avatar
    Erik Uzureau (@euzuro)

    Ha! People were saying the same thing when Mr. Bush was reelected in 2004.

  3. Avatar
    violette_c

    Couldn’t agree with you more – but: why sell to a government controlled company in the 1st instance? Best way to jeopardize the prospects of your company!

  4. Avatar
    Lucas Bonan

    Well in fact, there is a precedent: The Nissan-Renault deal. Who worked pretty well so far, despite Renault’s recent bad results. It seems like French Government wants a more equilibrate deal and preserve the French identity. For today it’s not 100% vs 25%, it’s more like Yahoo wants to own DM completely and AM can’t accept that. A good exit in the US means nothing for state own company. It’s not a question of few hundred millions. And after selling DM, what other advantages could France derive from the deal, except a bragging “we’ve sold something to the US”?

    Maybe it’s just a rep game. But one can arguably say that completely selling DM to Yahoo is really no good deal, given that except Vimeo, there is no other video assets like this in the world. And Yahoo might need that to complete its recovery. So, in this negotiation, even if DM strategically needs a big US player to enter the US market, I think France is maybe in a good position to claim a better deal.

    Let’s wait for the next round.

    Source:

    «Yahoo veut dévorer Dailymotion, nous leur avons dit : non, ce sera 50-50», a-t-il expliqué, avant de réclamer une solution préservant le caractère français de l’entreprise. «Nous souhaitons un développement équilibré», un montage du type de «celui qui a existé entre Renault et Nissan, où l’identité des deux entreprises est préservée. C’est l’intérêt de la France et l’intérêt de Dailymotion qui est une pépite française.»
    http://www.liberation.fr/economie/2013/05/01/dailymotion-assigne-a-residence_900317?xtor=EPR-450206

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