TechCrunch reported Tuesday that Yahoo was in talks to buy video ad company BrightRoll for about $700 million. BrightRoll was a 2014 CNBC Disruptor company. Whether or not the deal comes to fruition, should Yahoo buy the company?
Both Yahoo and CEO Marissa Mayer are the targets of as much criticism and second guessing as any technology executive in recent years, and this possible deal naturally finds analysts who are cautiously optimistic (well-compiled in this Wall Street Journal story from Wednesday), and witheringly critical (check out some analysts comments in this Business Insider story).
Among the positive points listed in the WSJ story:
- Yahoo needs a good programmatic advertising platform (which is projected to quickly become a very large part of online advertising).
- BrightRoll's technology is well-regarded, and
- The company makes good money, generating $100 million in revenue
Negative analysts say, among other things, that deficiencies within Yahoo will undermine any potential benefit of a deal. Other problems include:
- Yahoo's paying too much for the company.
- Actual synergies are unlikely to emerge, and
- This doesn't solve Yahoo's fundamental problem, which is that it's becoming less relevant to users.
Still, some people like the company (or at least its stock). Passport Capital's John Burbank explained to CNBC Wednesday morning why he's long YHOO. Hint: It has nothing to do with the core business.