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by Stephen Logan on 28th April 2010
Yahoo remains one of the leading contenders to procure leading start-up Foursquare and have now announced that they have secured the rights to show Premier League Highlights for the next three years. So is this the dawning of a new era for the search company or a desperate last effort to claw back relevance?
We have covered a lot of Yahoo stories in recent weeks. From their return to profit making [See: Yahoo Record First Quarter Revenue Increase] to speculation on their possible demise [see: Has Yahoo Jumped the Shark? (Following AOL and Netscape)], they are a business that keep making headlines. No bad thing, especially as they look to restructure the company following the YaBing linkup.
Their latest foray into the tech news streams came with their securing of Premier League football highlights on Yahoo.co.uk [see: Yahoo! scores Premier League highlights package deal result | The Register]. But what does football have to do with search? Well, not a lot really. This latest move is all about brand visibility and traffic.
With five minutes worth of action from every match in the Premier League, Yahoo will look to reach out to a new audience. As we all know, football is big business in the UK. Exclusive rights to show matches run into hundreds of millions each year. Fans want to see their favourite teams and enjoy the best action from (one of) the world’s leading league.
Look what football has done for Sky. The Premier League has been the core draw for many of its subscribers. The business has flourished as a result of football coverage. Yahoo will now be hoping for a similar, if slightly more low-key impact on their own fortunes.
However football has never been a guaranteed source of income, as ITV Digital and Setanta found to their cost. Yahoo will have invested millions in securing these rights, now they have to deliver.
Advertising will form the basis of Yahoo’s monetising for this service. Syndication too might well draw in some pennies, but ultimately they will need businesses to match their valuation of the coverage. They aren’t virgins though to this kind of sporting coverage. In the US they have a similar deal for hockey, basketball, golf and baseball.
The main difference though between the UK and the US, at least for Yahoo, is brand visibility. Yahoo.co.uk is the tenth most visited site on these shores. It commands 0.93% of all Internet visits. As reported in our latest search engine market share statistics, they also have 2.45% of the search market [figures courtesy of Hitwise Data Center].
Yahoo.com on the other hand is the fourth most visited site in the World [source: Alexa Top Sites]. In the US 16.9% of all search are conducted using the search engine. Facts can easily be fabricated from figures, but clearly there is a divide in usage that needs to be closed (for the better).
In terms of their global brand, the ongoing Foursquare acquisition talks provide an interesting, if somewhat confusing discussion point. The fast-emerging location based social networking application is a worldwide phenomenon. As such, investors are looking for ways to get their claws into them before they get huge (a la Facebook, MySpace, YouTube and Twitter).
At $100 million, Foursquare won’t come cheap. But the big question has to be whether Yahoo is the best company to take them forwards. What can a search engine really bring to Foursquare? Michael Arrington made his position extremely clear with his subtly titled post on TechCrunch: Don’t Sell Out, Foursquare. Not Now. Not To Yahoo.
Targeting a few of Yahoo’s less successful acquisitions and the fact that their ‘senior team is grasping at straws’ the article doesn’t pull any punches. But could this all just a ploy?
If Yahoo buy Foursquare, suddenly they have a fresh product that people are using throughout the world. In markets such as the UK, where the Yahoo brand is suffering, this provides them with much needed exposure. In search, exposure means visitors and visitors can bring advertising revenue. Even if it goes belly up, they could stand to earn far more from the deal in the long-term.
Which brings us back nicely to the Premier League. As we know, Yahoo isn’t massive in the UK. Ask 100 people in the streets to name a search engine and I very much doubt that many would come up with Yahoo. But Premier League football is.
Okay so their highlights will come after the BBC’s Match of the Day and Sky’s live and news content, but there is still an audience for a decent five minute round-up online. With new visitors coming in to watch their favourite team, Yahoo can capitalise by promoting some of their other services.
Online streaming is becoming more popular; just look at last year’s England qualifier against the Ukraine, which was exclusively screened on the Internet [see: England Football Match Online: The Future or a Flash in the Pan?]. Whilst not a massive success, it shows that there is a clear market for online sports content – at least in the eyes of the marketers.
If nothing else, it at least shows a willingness to work on their global brand identity. Whilst some commentators might label them desperate captains on a sinking ship, Yahoo’s management aren’t going down without a fight. Is it too little too late, are they focusing on the wrong areas? What do you think?