As per Sky News, Yahoo! Inc. has offered around $250 million to acquire Fullscreen Inc., one of the largest independent content producers for Google’s (GOOGL - Free Report) YouTube. These are not the first reports that point to Yahoo!’s intentions to poach YouTube’s big star talent and famous networks. Yahoo! however declined to comment.
Yahoo! is planning to compete against YouTube by launching its own online video website in the next few months. The latest move is yet another strategy to establish its foothold in web video programming and boost its video advertising returns. Moreover, with these efforts, Yahoo is seeking to extend its reach among the young generation.
Fullscreen, based in California, was founded in 2011 by a former Google executive and is the latest online video network to grab the attention of media giants. The Fullscreen network generates more than 3 billion YouTube video views per month and boasts over 300 million global subscribers. The company claims to be an international network of content creators and helps small video-content makers with advanced technology and services.
Therefore, if the rumors are true, Yahoo! will find a way to connect to the youth and at the same time expand its video content inventory. It will help Yahoo! to make it big in the online video content space.
However, Yahoo! is not the only company interested to acquire the ownership of Fullscreen. The Chernin Group, an investment management company founded by ex-News Corporation executive Peter Chernin, is also in the race to to buy the content provider. The Chernin Group is one of Fullscreen’s investors. It along with WPP and Comcast (CMCSA - Free Report) Ventures had invested in the content provider in June last year. In May, Time Warner Inc. was also in talks to acquire Fullscreen.
Considering the many suitors and the strategic value of such a deal, it’s better to take a wait-and-see approach. After all, Google is an established player while Yahoo is struggling to get attention. Moreover, it has apparently just announced a plan to spend $10 million on a new YouTube series.
Whatever the case may be, Yahoo! seems to be determined to take on YouTube by launching its new video service pretty soon. Only time will tell if Yahoo’s execution is good enough to achieve the desired results.
Yahoo! currently holds a Zacks Rank #4 (Sell).