Yahoo (NASDAQ:YHOO) has been in talks with French video sharing site Dailymotion for months. The search engine and Internet content company was gearing up to acquire a majority share in the business in a bid to expand its world presence and better compete with rival Google (NASDAQ:GOOG) and its popular YouTube. Dailymotion, which is owned by France Télécom, ranks fairly low in popularity amongst US users -- placing at just 22nd in the country -- but it is the 11th most popular in the world. The move would have given Yahoo a firm footing outside the Americas, which currently accounts for roughly 70% of its revenue.
Notice the past tense.
"You don't know what you're doing."
The sale unraveled after an April 12 meeting during which French Industry Minister Arnaud Montebourg said that he did not want 75% of a French success story to be sold to an American giant. "I won't let you sell one of France's best startups," said Montebourg. "You don't know what you're doing."
There have been efforts made to salvage the deal, which had been valued at $300 million, but so far no go. According to the Wall Street Journal, "France Télécom-27% owned by the French state-remains open to a deal if Yahoo wants to come back to the table."
Montebourg's chief of staff Boris Vallaud explained, "The government isn't the one that closed the door" to a deal between Dailymotion and Yahoo. He continued by adding that the minister "doesn't oppose a Yahoo-Dailymotion deal, as long as it is a win-win partnership" at "50-50." However, Yahoo has made it clear that it is not interested in acquiring a minority share in Dailymotion. The company is reportedly looking "somewhere other than France for its next move."
Becoming a Mobile Force
Yahoo CEO Marissa Mayer has been on an acquisition spree since taking the helm last summer. Under her guidance, the company has made several acquisitions. In some cases, the aim was the technology. In other instances, Mayer wanted to buy the talent that developed it. Sometimes, it was a mixture between the two. The aim was always the same -- buying the resources to turn Yahoo into a mobile force.
To date, Yahoo has acquired Jybe, Stamped, OntheAir, Snip.it and Alike. Most recently, the company purchased Summly, a mobile news reader that summarizes news articles and allows users to find articles using keywords. After the roughly $30 million deal, Yahoo said on its blog, "while the Summly app will close, you will see the technology come to life throughout Yahoo!'s mobile experiences soon."
"We think about how do we take the Internet and order it for you," said Mayer at the World Economic Forum in January. Yahoo intends to be "a feed of information that is ordered, the Web is ordered for you and is also on your mobile phone." Mayer continued, "The nice thing at Yahoo is we have all of the content people want on their phones. There's an opportunity, not only to provide that value to the end user, but also to create a great business."
Yahoo, the Information Aggregate
Yahoo is taking some big steps towards becoming an information aggregate, and I think it is well suited to the challenge. Very few people use a Yahoo email address or Yahoo's search engine, but I am willing to bet that most people on this site use Yahoo Finance for basic stock research. It is a strength for which the company has rarely been given credit.
Mayer's focus on this aspect of the company's business is smart. I think once the acquired technologies are woven into the Yahoo framework we are going to see more people turning to Yahoo. Many companies already have outsourced certain information aggregate functions to the company -- did you ever notice that Yahoo powers both the Stocks and Weather features on Apple (NASDAQ:AAPL) products?
Currently, Yahoo is trading around $24.30 on a 52-week range of $14.59 to $25.37. It carries a one-year target estimate of just $25.42, but I think that is extremely conservative. Yahoo is bound to get in the upper 20's within the next year, and I think the mid 30's are not out of the question by 2015 as Mayer's acquisitions become more ingrained into Yahoo's framework.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.