Dailymotion Stays French Following Failed Yahoo Deal

Yahoo! Headquarters Sunnyvale CA Exterior - H 2013
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Yahoo! Headquarters Sunnyvale CA Exterior - H 2013

Parent company Orange will hold onto the video-sharing site.

PARIS – After singing the blues following a failed Yahoo deal in May, Dailymotion will stay Orange.

Parent company Orange -- the new name of France Telecom officially adopted on July 1 -- will keep the video-sharing site in house.

“We decided, after discussions with the Dailymotion team, to implement a plan to develop the company within Orange,” said CEO Stephane Richard, marking a turnaround from his previous statements that the French site needed an international partner for global growth.

After failing to find a suitable international partner and rebuffing interest from big French conglomerates, including Vivendi and Lagardere, Orange will double down on Dailymotion with a $39.5 million (€30 million) investment.

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Back in May, Yahoo was set to take a 75 percent stake in the French YouTube competitor for $300 million (€227 million), only to be blocked by the government, which wanted to protect the homegrown success story from being “devoured” by an American company and insisted on a 50-50 split. Yahoo then backed out of the deal.

The cash infusion will go to revamping the platform and expanding the site’s international presence, opening offices in Spain, Japan, Canada and Brazil, and focusing on the U.S., U.K. and Germany as key markets for growth. The company is seeking to triple its revenues from $49 million (€37 million) in 2012 to $131 million (€100 million) by 2016.

In the interview with business newspaper Les Echos, Richard indicated that the website will shift its focus to audience growth. Orange, which provides TV, Internet and mobile services for 226 million customers worldwide, will look for synergies between the two companies, possibly including bundled apps in the smartphones it sells, pay TV or VOD services.

Still dwarfed by Google’s YouTube, which has about 10 times the traffic, Dailymotion is ranked the 31st-most-visited site in the world by Comscore, with 2.5 billion videos viewed and 112 million unique visitors per month.