French Lessons: Why Dailymotion-Yahoo! Deal Went Sour
Yahoo! wanted to buy the video platform Dailymotion, owned by France Telecom. But with the French government opposed come reminders of what needs fixing in France's startup world.
PARIS - Ah, if only we were Americans! If our startups could lean on a vast home market to take flight. If they could conquer the world with a simple service in English. Everything would be simpler and our little gems, from seloger.com to vente-privee.com or viadeo could do battle on the same playing field with world champions like Amazon or Facebook
Yes, but you don't build businesses with “ifs...” In order to grow, our start-ups must find anchors in the US, or somehow attain an international dimension. Criteo, in digital advertising, won this gamble. Deezer is about to.
Dailymotion, the gifted No. 2 Internet video platform needs, in order to survive under the massive shadow of Youtube, to reach a new dimension. Too French, the group can not afford to refuse a massive presence in the United States. Yahoo! taking control would have allowed it to cross this threshold. The American company was likely to help it, first for acquiring broadcasting rights and secondly, through its services, by expanding its audience.
French public authorities, in the name of defense of national interests, have blocked the sale of this startup controlled by France Telecom, afraid that Yahoo! would dismantle this company. This fear was unfounded. Yahoo!"s goal was to own competences and to lean on excellent though relatively less expensive French engineers and developers. France could have been a major piece in Yahoo!"s global Internet jigsaw puzzle.
A stronger Dailymotion, even controlled by Yahoo!, would have been a great asset in our nation's own digital ecosystem. This road has now been blocked. France Telecom will have to take its responsibilities, and begin to properly fund and support a company that has until now never seemed a priority for the management. Otherwise, France will wind up wasting yet another golden opportunity.