Yahoo! Makes First Post-Semel Move
Answering the question posed yesterday (“Where do we go from here?“), Yahoo’s first move out of the gate in the post Terry Semel era was to acquire high school and collegiate sporting site Rivals.com for a rumored $100 million.
This is a content move, meant to bolster the artillery of Yahoo!’s media group, which has floundered in many ways since the departure of its head, Lloyd Braun (Braun’s departure happened in conjunction with December’s corporate reorg). The wheels for this move were in motion before Semel resigned earlier this week.
This will build the competitive differentiation Yahoo! has attempted to develop for Yahoo! Sports against rivals (sporting pun not intended) ESPN.com and CBS Sportsline. If you are a basketball fan (or a gambler) you’ll recognize this rivalry as it is most apparent during the NCAA tournament, as the online pool you join is invariably run by one of these three players (again, no pun). The same goes for fantasy leagues in every major sport, for which Yahoo! sports is currently the market share leader, according to comScore.
The Tennessee-based Rivals.com has 108,000 subscribers and makes money from a combination of subscriber fees, advertising and e-commerce. Meanwhile, it boasts a total user base of about 2.5 million high school and college sports fans (1.4 uniques in May, according to comScore) and has 108 college team sites and about 48 regional sites for high school sports fans.
This high school focus could have important hyper-local implications and build local traction for Yahoo! with news surrounding local sports. On a local level, this could help build content to enhance the company’s overall strengths in local search and even social media, which it relies heavily upon. This could involve rallying (the sports puns are too easy) local users around search, social networking, user-generated content, retail and services that all relate to local sporting venues and events.
The possibilities are wide open for Yahoo! to redefine itself at this crossroads, so this acquisition could join the fold in lots of interesting ways. We’ll have to wait and see how it fully realizes the value of the new asset, and how it decides to put it in the game (sorry).