Online video provider Dailymotion, one of the strongest competitors in the user-generated content market dominated by providers like Google's (NASDAQ: GOOG) YouTube and Amazon (NASDAQ: AMZN)-owned live-streaming service Twitch, could be a Vivendi property soon if a takeover bid made by the media giant holds.
According to The Hollywood Reporter, Vivendi's offer to take a controlling stake (as much as 75 to 80 percent, according to Deadline) in Dailymotion, valued at €250 million ($272 million), may have a decent chance.
Previous offers from companies including Hong Kong-based PCCW and YouTube were rebuffed by France's government, which said Dailymotion must remain in French hands. Currently, wireless operator Orange owns the online video company, but reportedly has been looking for another company to come in and help Dailymotion expand internationally. However, since the French government owns 25 percent of Orange, it has a say in the process.
Despite being the No. 2 most visited online video site worldwide, Dailymotion lags far behind YouTube with just 128 million unique visitors per month. But the provider has big aspirations: In addition to a goal of expanding worldwide, it recently launched its own live-streaming platform, Dailymotion Games, which aims to eat away at Twitch's audience of avid gamers.
Vivendi has refocused itself on the burgeoning content market in recent years. The media company sold off telecom assets including Maroc Telecom and SFR, as well as Activision Blizzard. It currently owns Universal Music Group and pay-TV operator CanalPlus, and recently launched the Global Music Data Alliance to boost revenues using big data.
While Vivendi's bid on the surface looks like a positive move for Dailymotion, not everyone is predicting success should the purchase go through. An op-ed by Forbes contributor Jean Baptiste Su said that by chasing off foreign investors like PCCW--whose bid was "a strikingly same offer" as the one made by Vivendi--France is killing YouTube's biggest competitor. "And with the video site's glory days long gone, France's top brass obstination to keep the control of this former tech leader is a mystery to me," Su wrote.
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