At the beginning of last year, Yahoo
made a fairly large acquisition with the purchase of online video distribution and advertising provider Maven Networks. Under the terms of the agreement, which we reported as a rumor the same day the papers were signed, the company acquired the startup for approximately $160 million. At the time, the press release touted the acquisition to lead to an expansion of the “state-of-the-art consumer video and advertising experiences on Yahoo.com and Yahoo’s network of leading premium video publishers across the web”
Now we’ve learned Yahoo is going to kill Maven Networks instead, the most recent in a long series of deadpooling of products and services by the Sunnyvale Internet behemoth. A tipster, who works for a large media company, tells us that he has been a Maven customer for years and was informed last week that Yahoo will cease all development on the platform and will no longer be supporting it in 2010.
We’ve confirmed with another source that Yahoo has effectively decided to shelve Maven, firing most of its employees in a move packaged as a restructuring and has already notified customers that the product will no longer be supported as of next year. Furthermore, the source tells us that the Maven technology has never even been used for Yahoo’s own video properties, underscoring why the quote I lifted from the press release in the first paragraph of this post sounds so void today.
Update: we received a statement from Yahoo about this:
“Since acquiring Maven Networks in 2008, Maven has played an important role in our video strategy, providing essential talent and core technology that has helped Yahoo! to enhance its consumer and advertising offerings. Maven technology is used in the Yahoo video player, as well as in the Yahoo Video Advertising Platform that is being used to serve both on- and off- network advertising for Yahoo! partners.
While video initiatives remain a priority for Yahoo!, both for its consumer and advertising experiences, we are increasing investment in some areas while scaling back in others. After careful consideration, Yahoo! is planning to wind down its Maven Networks customer base. This decision will allow us to focus our resources on the continued improvement of our core video offerings, such as enhancing the consumer video experience on Yahoo!. Since Q4 2008, we have closed or announced our intention to close, nearly twenty Yahoo! services– such as Yahoo! 360, GeoCities, My Web and Yahoo! Briefcase. We continue to evaluate our portfolio of products and services on a regular basis, and plan to share details of further changes with people who use our products in the months ahead.”
Yahoo also said that the rumor about the Maven team being mostly laid off is inaccurate.
There’s always the possibility that the platform will eventually live on under different ownership of course, but rest assured that competitors like Brightcove, Ooyala and KIT Digital are currently celebrating over the news.
This is the third video property Yahoo has killed off in less than 8 months, after shutting both Y!Live, a live video streaming service, and Jumpcut, an online video editing tool. Remarkably, Yahoo CEO Carol Bartz recently declared on stage at a conference that the company is actually still interested in acquiring startups in the business of digital video technology.
One month and the shuttering of a $160 million video technology acquisition later, it’s close to comical reading those words again. Then again, Yahoo’s prospects and financials at the time the acquisition was made sure looked a a whole lot better than they do today, so maybe it’s just too easy to judge the move in hindsight.
Either way, Maven Networks is now a member of the deadpool club, although there’s always the possibility of Yahoo selling off Maven to someone who wants to revive it.
COMMENTARY: While doing some research for a former client in the online media content arena, I came across Maven Networks. The news that Yahoo! had purchased Maven Networks for a reported $160 million, is again, another example of over-valuation exhuberance that has gripped the digital world. Just yesterday I posted an article that Microsoft was unloading Razorfish, one of the top five digital ad agencies in the world. The price tag is $1 billion. However, Microsoft paid $6 billion for eQuantive, which is the holding company for Razorfish.
The business model that works appears to be member submitted content that you see on YouTube and other video sharing sites. Content providers are struggling, and the whole market has become a commodity, with nobody really making any money.
I can remember Maven Networks bragging about how many online networks they operated and were right behind YouTube in total daily traffic, if you added up all their sites. Pooh, pooh. If you don't make money, you go out of business.
Added into the mix are original content providers like ESPN, Fox Sports, CNN, Fox News and others that have huge inventories of original content which they have decided to monetize on their own. Why would you unload your content to a digital content provider like Maven Networks or Brightcove?
This is another example of the shake-out in the digital content arena. Will Brightcove be next?
Courtesy of an article dated June 29, 2009 appearing in TechCrunch.com
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