& cplSiteName &

Facebook Too Pricey for Yahoo?

Light Reading
News Analysis
Light Reading
10/18/2006
50%
50%

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, Heavy.com, and Guba.

Light Reading's readers, in a recent poll, say Blip.tv, 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
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
Twilight Star Authors AI Paper

1|24|17   |   00:46   |   (0) comments


Actress Kristen Stewart, best known for starring in the Twilight movies, has co-authored an academic paper on the use of artificial intelligence (AI) in a short film she has directed.
LRTV Documentaries
Apple, Qualcomm Lock Horns Over Licensing

1|24|17   |   01:07   |   (0) comments


Industry giants clash over licensing fees.
LRTV Interviews
Heavy Reading: The Web-Scale View

1|18|17   |     |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's former chief analyst Patrick Donegan shared insight from the recent web-scale operators report, which featured research on how web-scale operators view the market, the best web-scale companies to ...
LRTV Custom TV
Cisco's Cloud Scale Networking: Automation, Virtualization & Simplification

1|18|17   |     |   (1) comment


Cisco's Sanjeev Mervana outlines the latest innovations in networking technology at CES 2017 in Las Vegas.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (2) comments


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
Upcoming Live Events
March 21-22, 2017, The Curtis Hotel, Denver, CO
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
A Women in Comms Glossary
Sarah Thomas, Director, Women in Comms, 1/18/2017
Is Cable One Beefing Up for Slaughter?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 1/20/2017
Google Security Lessons for IT
Curtis Franklin, Security Editor, 1/18/2017
Nokia CTO: 2017 Is the Year 5G Gets in the Field
Dan Jones, Mobile Editor, 1/19/2017
Do Women-Only Co-Working Spaces Work for Women?
Sarah Thomas, Director, Women in Comms, 1/24/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
You've Heard of Slow Food? Click Here
This is slow tech.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.