Yahoo recently expressed a keen interest in acquiring Dailymotion. The France-based video company is among the most popular video sites online. Following Yahoo’s move, the French government has stepped in to rescue the company, citing that it can’t sell its biggest internet startup success story.
Dailymotion is originally owned by Orange, which in turn is owned by France Telecom. French government was able to express its reservations over the expected deal with Yahoo, because it has a 27% stake in France Telecom.
The deal that Yahoo was looking forward to sign with Dailymotion would’ve lent the company 75% share in the video site. It was expected to rake in some $300 million. However, the French government intervened and decided not to take the deal. This may have been a decision in the national interests, but it certainly ripped Dailymotion of an extra-ordinary opportunity to grow internationally.
As a consolation, the CEO of France Telecom has announced that his company has plans of investing €30 – €50 million in Dailymotion. Compared to the $300 million being offered by Yahoo, this is too little. However, if the investment really goes well and Dailymotion is able to make good use of it, the company may be able to attract a global audience.