Light Reading

Facebook Too Pricey for Yahoo?

Light Reading
News Analysis
Light Reading

Google's $1.65 billion valuation of the video sharing site YouTube will make it harder for Yahoo Inc. (Nasdaq: YHOO) to buy the social networking site Facebook for a reasonable sum, industry observers say.

Yahoo has been losing ground to Google in the Internet ad business, and some people think the company needs an effective counter punch to Google's latest ad traffic land grab.

Yahoo's talks to buy Facebook reportedly broke down because of a serious disagreement on price. Google's valuation of YouTube isn't likely to help matters.

"There is a finite number of acquirers out there," says Bart Schachter, managing director of Blueprint Ventures in San Francisco. "There's a vast gulf between what other acquirers might want to pay and what other acquirees might want to get -- that gap is now getting even wider. Companies like Yahoo, not to mention the old-time companies, can't afford these kind of prices." (See LR Ranks Video Sharing Sites.)

Yahoo chose not to comment for this story.

Even if Yahoo were game, there are not many media properties out there with the kind of traffic generated by YouTube. With YouTube in the fold, Google will control a 60 percent user market share in the video sharing market, according to Hitwise. "The deal gives Google a leg up versus Yahoo and MSN in online video, and paying 1 percent of Google’s market cap for leadership in an important online category is reasonable, in our view," writes Merrill Lynch & Co. Inc. analyst Justin Post in a recent research note.

YouTube wasn't profitable, but its large audience spends an average of more than 20 minutes per visit, and that's a good thing for advertisers. The market for Internet video advertising, says eMarketer, is growing rapidly and will reach $640 million in 2007 and grow to $1.5 billion by 2009.

Some believe Yahoo will buy something in the video sharing space, even if no more traffic monsters like YouTube are available.

"It's more likely a buy than a build," says American Technology Research analyst Rob Sanderson of Yahoo's probable strategy. "Google is arguably a little better at bringing services to market organically. Yahoo down through the years has been more likely to bring things to market through acquisitions.

"Are they looking? Yeah, I'm sure they're looking at all kinds of things in this area," Sanderson says.

The rumor mill in Silicon Valley has been actively handicapping the next video sites to be sold. The names that come up most include MetaCafe,, and Guba.

Light Reading's readers, in a recent poll, say, Motionbox, and VideoEgg are all likely candidates for the taking. (See YouTube: Who's Next?)

Sanderson says Yahoo isn't feeling pressure to buy: "Is there a gun at their head to do a deal? Probably not; I don't think they feel that way."

— Mark Sullivan, Reporter, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Custom TV
Delivering Service Agility in the Virtualization Era

11|25|15   |   5.41   |   (0) comments

Interview with Massimo Fatato, WW OSS Business Lead, Hewlett Packard Enterprise.
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (9) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (1) comment

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
LRTV Huawei Video Resource Center
Huawei Electric Power Summit 2015 – Addis Ababa, Ethiopia

11|16|15   |   1:28   |   (0) comments

Huawei, together with Ethiopia's Ministry of Water, Irrigation and Electricity, hosted the Huawei Electric Power Summit 2015 in Addis Ababa, Ethiopia. The event gathered industry experts and senior executives of global electric power companies to discuss emerging industry trends including: improvements in new energy conversion efficiency, reduction of line losses ...
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Sprint, Verizon Face Reorganization, Job Cuts
Dan Jones, Mobile Editor, 11/20/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
How Might Open Source Fail?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/24/2015
Networking Shines in HP's Gloomy Final Earnings
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Mobily CEO Ahmad Farroukh talks to Steve Saunders about the realities of being a mobile operator in Saudi Arabia.
Cats with Phones
Can't Find the Phone on Thanksgiving? Click Here
Check under the cat! (hint: bottom right)
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.