Yahoo! Buys Maven Networks: Revenue Multiple Too High

As I’m sure you’ve read by now, Yahoo! announced earlier in the week it had acquired Maven Networks for approximately $160 million. While I see some of the synergy of the deal, I think Yahoo! paid too much. Based on the price tag, Yahoo! paid about 11x the sales revenue that Maven had in 2007. It’s a good deal for Maven shareholders, but for Yahoo!, that’s a high evaluation in my eyes in today’s market.

Clearly, Yahoo! bought Maven for their technology platform and IP, but at some point, you have to also look at the buy vs. build numbers. Acquiring Maven gives Yahoo! a platform today, as opposed to them having to build one themselves, but at what cost? Considering the state of the rest of Yahoo! business, selling a software video platform is very different than the way Yahoo! has sold everything else for years. And not really knowing what Yahoo! strategy is as a whole moving forward casts doubt on what will truly become of a Maven/Yahoo! integration.

While it sounds like the product will still be branded under the Maven name, Yahoo! should re-brand this immediately and bring it under the Yahoo! brand. With the sate of flux that Yahoo! is in as a company, I think it needs to do everything it can to put forth one clear brand, strategy and core set of products. I think over time the Maven platform could be a good core product for Yahoo!, but only time will tell how successful the integration will be and whether or not Yahoo! sticks to the set of current products offerings they have in the market today. In my eyes, it’s hard to for Yahoo! to say to the market that it is dedicated to any product platform, while at the same time laying off 1,000 employees. How much will Yahoo! truly support the Maven platform with additional dev work and new products features and functionality?

  • AB

    What about Yahoo! using their own CDN (if they have one) for Maven and its customers?

  • MPE

    The main question is how many time will Yahoo buy a like service? I am also not fully convinced that rebranding at this time would be such a smart move. The platform has done very nicely staying “the platform”. Rebranding at this stage could cause the company to get lost within the larger portfolio of the Yahoo brand. I do think that Yahoo should look to roll out a light version of the Maven platform that is free or low cost to keep or increase yahoo subscribers. Just my $.02

  • 🙂 Thought you were not a financial guru – only a technology specialist?
    NO ACTUAL comment on the thread – just wanted to stop by and give my 2 pennies.

  • SeatleStew

    My Questions is what if you were one of the people that dumped all that money into Brightcove. Brightcove is useing the same technology from Maven. I think I would be upset to say the least.
    Although Maven and Brightcove say they go after different type customers (with the same underlying technolgy), now that Yahoo owns them I think they will try to crush Brightcove. Dan any Thoughts on this? Anyone?

  • Brightcove and Maven’s technology platforms are very different. Yes, they are going after many of the same content owners, but Maven started off as a platform that required users to download a Maven plugin. Very different the way the two companies have evolved over time and the solution sets they offer. Brightcove also have a lot_more customers and from what I hear, more than 2x the revenue Maven had.

  • TMR

    As a customer who has tried both systems, I can tell you that Maven and Brightcove are today not that different. Maven has not required a plugin for over two years now and is 100% streaming based. It has the higher end system of the two. Brightcove has many small media customers (like the Ship Wreck Channel) while Maven has many more big media customers (like Fox, Gannett, Scripps, Sony, etc.). Their revenue structures are different with Maven charging a recurring fee for use of its system and Brightcove marking up and reselling Limelight bandwidth. If you take out the bandwidth element, Brightcove’s net revenue is probably less than Maven’s. It says a lot that Yahoo picked Maven as the company to buy vs. Brightcove…