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France reportedly scuttles Yahoo's bid for Dailymotion video portal

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Yahoo Bldg
Yahoo Bldg

Yahoo's bid for a controlling stake in video portal Dailymotion has ended after the French government raised objections to the deal, according to reports. The collapse of the talks is a blow to Yahoo, which has been fighting the perception it is irrelevant by acquiring up-and-coming talent and releasing well-regarded new apps. It also deprives them of a new distribution channel for original programming and the advertising that will run alongside it.

Dailymotion is owned by France Telecom-Orange, in which France holds a minority stake. TechCrunch, building on an earlier report from Le Monde, reports that France's minister of industrial renewal did not want to see one of France's marquee Internet companies sold off to a U.S. tech giant. The minister, Arnaud Montebourg, pressed Orange to find another U.S. partner for Dailymotion, according to TechCrunch.

Last month, the Wall Street Journal reported that Yahoo CEO Marissa Mayer hoped to use Dailymotion to fuel growth in video consumption overseas. The company planned to spend $200 million or more on Dailymotion, according to reports, in what would have been Mayer's most expensive acquisition since becoming CEO.

France Telecom pulled out of talks just as Yahoo invests more heavily in video programming. Last week, the company announced an exclusive deal for Saturday Night Live clips; today, it revealed six original programs to debut later this year and a new partnership with WWE. Dailymotion would have given the company a central place to distribute those shows.

France Telecom will continue looking for an American partner for Dailymotion, which the company sees as essential to helping Dailymotion succeed in the United States, according to Le Monde.

Yahoo and France Telecom have not yet responded to a request for comment.