In a bid to have a much larger video presence and possibly compete with YouTube – the world’s largest video aggregation website, Yahoo is planning to acquire online video service News Distribution Network for USD 300 million. The idea is to help bolster the company’s online video programming and video advertising revenue.
The news was first released by the Wall Street Journal on Monday which claimed that both companies are in currently in “preliminary talks” of the acquisition. However when contacted, NDN spokesperson Krystal Olivieri stated that the news is a mere fake assumption and the company is not in talks to be acquired by Yahoo.
Founded in 2007, NDN provides free solutions for online publishers and content creators to monetize online from sophisticated video players and premium brand-safe content.
Putting some more light on the possible rumor, Kara Swisher and Peter Kafka from Recode reported that Yahoo is actively trying to get on board some of the biggest stars and producers behind YouTube, for its own video competitor. “Yahoo executives have told video makers and owners that the company can offer them better economics than they’re getting on YouTube, either by improving the ad revenue or by offering guaranteed ad rates for their videos,” Recode’s report mentions.
Well, whatever the case is, this all makes perfect sense for Yahoo, if the company wants to add another – yet influential – stream of revenue to its current billion-dollars business.
Market research firm, eMarketer in August forecasted that the video ad spending is going to increase significantly in the times to come. The report said that the total video ad spending would more than quadruple from 2011 to 2017, making it the fastest-growing format of digital ads throughout that time period.
This isn’t the first try ever by Yahoo to establish itself in the market of digital advertising. The company submitted a bid to buy Hulu an on-demand video streaming channel last year. It was also planning to buy Dailymotion the same year, but eventually ended up getting a controlling stake in it for some USD 200 million.
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