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Yahoo Set to Buy NDN

Zacks Equity Research

Yahoo! Inc. (YHOO) seems to be determined to take on Google (GOOG)-owned online video streaming website YouTube. According to the Wall Street Journal, Yahoo! is in preliminary discussions to acquire News Distribution Network (NDN.TO), a web video platform for around $300 million, the same amount which it was willing to pay for Dailymotion, a video streaming website, last year. However, those plans were unsuccessful.

Re/code’s, a technology news site, recently reported that Yahoo! is planning to compete against YouTube by launching a much larger next-generation video website in the next few months. The latest move is another of its strategies to establish its foothold on the web video programming platform and boost its video advertising returns. However, neither party was available for any comments.

The Internet portal has been on an acqui-hire spree since Marissa Mayer became CEO in 2012. Under her leadership, the reported acquisition will be Yahoo!’s second major purchase, after Tumblr for which it paid $1.1 billion.

NDN was founded in 2007 to offer solutions to web publishers and content producers to operate successfully in the web environment to augment profits. These solutions are provided free of charge. Moreover, it doesn’t create its own video content but broadcasts a compilation of around 100,000 videos about news, sports, politics and other topics to news websites like Los Angeles Times, New York Daily News, Bloomberg and other online publishers. According to comScore, Inc. (SCOR), provider of digital analytics solutions to enterprises, NDN is the fourth major online video website in the U.S.

Previously, Yahoo! had tried to acquire Hulu, an online TV shows and movies streaming website but the deal fell through as the owners backed out.

Currently, Yahoo! holds a Zacks Rank #3 (Hold).

A better-ranked stock in the technology sector is Facebook (FB), carrying a Zacks Rank #2 (Buy).

Read the Full Research Report on YHOO
Read the Full Research Report on GOOG
Read the Full Research Report on SCOR
Read the Full Research Report on FB


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