Yahoo in talks to acquire online video service NDN

Yahoo Inc. is in preliminary talks to acquire online-video service News Distribution Network Inc., a deal that would help Chief Executive Marissa Mayer compete with Google Inc. GOOG -0.50% ‘s YouTube for viewers and ad dollars. Yahoo could pay roughly $300 million for NDN, according to two people who have been briefed on the matter and asked to not be named. The discussions are still early and a deal may not be reached for several weeks or may fall apart, said one of the people.

Ms. Mayer has made online video a centerpiece of her strategy to get users to spend more time on Yahoo pages and watching ads. NDN, a video syndication service that supplies newspapers and other Web publishers with clips about news, sports, politics and other topics, would help Yahoo expand its video offering to thousands of new sites and potentially create lucrative opportunities for marketers to work with Yahoo.

“We are not in talks to get acquired by Yahoo at this time,” Krystal Olivieri, a spokeswoman for NDN, said in an interview.

Yahoo first discussed an acquisition of NDN before Ms. Mayer joined in 2012, but no deal was reached, according to one of the people briefed on the matter. The talks have been renewed in recent weeks, as Ms. Mayer seeks to build a catalog of video content to rival YouTube. The technology blog Re/code last week reported that Yahoo executives have approached popular YouTube video creators about publishing their clips on Yahoo.

At $300 million, an acquisition of NDN would be Ms. Mayer’s second largest at Yahoo, after paying $1.1 billion last year for Tumblr. Yahoo has also bought dozens of startups to add talent and technology during Ms. Mayer’s tenure.

Yahoo tried and failed to acquire a stake in French video site Dailymotion last year after talks stalled with its owner, France Telecom SA ORA.FR -0.28% . Yahoo also bid to acquire Hulu, before the TV portal’s owners decided not to sell it. NDN was founded in 2007 by Greg Peters, a former AT&T Inc T 0.00% executive. The company has raised funding from TomorrowVentures, the investment firm owned by Google Chairman Eric Schmidt, as well as celebrities including actor Bill Murray and Hall of Fame baseball player Reggie Jackson.

The company doesn’t make any of its own video. Rather, it has built a collection of over 100,000 videos from partners like local TV news stations, and makes the clips available to editors at sites such as the Los Angeles Times, New York Daily News and Bloomberg. NDN also sells ads to accompany the videos, and keeps a portion of the revenue it generates. The company is profitable, according to one of the people briefed on the deal.

Google is by far the largest video site, with 12.6 billion video views in January, according to comScore. NDN is the fourth-largest video site, with 573 million video views, and Yahoo is fifth, with 384 million. Ms. Mayer has also acquired the rights to shows like “Saturday Night Live” and hired TV veteran Katie Couric to star in a series of online interviews with news makers.

“The industry is at a critical moment embarking on the next-generation of video consumption,” Ms. Mayer said on stage at a technology conference in January.

Looking to strengthen its position in online video, Yahoo is in talks to acquire video syndication service News Distribution Network for $300 million, according to a report published Monday by The Wall Street Journal.

The service, which was founded in 2007 and syndicates video clips to newspapers’ and outlets’ Web sites in content areas like news, politics and sports, could fit into a larger push into media by Yahoo CEO Marissa Mayer. The chief executive has been investing heavily in online content — snapping up talent like anchor Katie Couric and former New York Times columnist David Pogue to run news properties for Yahoo.

The company also is actively trying to poach YouTube’s biggest stars and producers for its own video competitor, according to a report published last week by the blog Recode. The draw would be better economic terms, like improved ad revenue or guaranteed ad rates. Researcher eMarketer in August forecast that video ad spending would more than quadruple from 2011 to 2017, making it the fastest-growing format of digital ads throughout that time period.

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