Tuesday, February 12, 2008

Behind Yahoo's $160M Acquisition of Maven: Maven CEO and Board Member Discuss

What do you ask for in February 2008, when you sell a company to Yahoo?

Cash, baby.

Yahoo paid $160 million for Cambridge-based Maven Networks -- almost all of it in greenbacks, not Yahoo stock. (Here's the AP story...and the official press release.)

"There's no way to arbitrage Yahoo's stock price when Microsoft may be buying them, or may not be buying them," says Woody Benson, managing general partner at Prism VentureWorks, which invested in Maven's most recent round of financing. (Yahoo rebuffed Microsoft's $44 billion purchase attempt on Saturday.)

Benson told me this morning that there was more than one company interested in owning Maven, but acknowledged that he was a bit anxious about whether the deal would go ahead once Microsoft started to make a run at Yahoo: "Anxious would be one word for it," he said.

Benson said that Maven and Yahoo signed a letter of intent around Thanksgiving, and that due diligence proceeded until Microsoft made its unsolicited offer to acquire Yahoo on February 1st. Benson says that the Microsoft offer didn't necessarily cause Yahoo execs to slow down or speed up the final negotiations in the Maven deal; I'd earlier speculated that it could hang in the air for a while. The final papers were signed on Sunday.

"There's a reason why they're buying us," Maven CEO Hilmi Ozquc said, when I suggested that Yahoo (and Microsoft) had missed the boat on the online video explosion. "The tech innovation has been happening at start-ups to date. But as the giants jump in, the fastest way to get there is through acquisition."

Ozguc and Benson both say that Yahoo's big advertising salesforce will help Maven vault ahead of other video players, like Brightcove (and perhaps even put it on an even footing with YouTube, which has been slow to integrate ads with videos.)

My last question for Ozguc was whether he'd be surprised if Microsoft now bought Brightcove: "I would not be surprised," he said. "But if they're going to buy Yahoo and get Maven for free, why?"

Update: Will Richmond has a longer Q&A with Ozguc on his site, Videonuze.

The NY Times Bits blog offers a critical take on the purchase...and here's the Globe coverage of the deal.

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