Yahoo! Inc. (YHOO) is in discussions to acquire RayV Inc., a startup that specializes in enhancing high-definition (HD) online video streaming. However, details are scarce because neither party was available for comment.
RayV is a Los Angeles-based company with research and development (R&D) operations in Tel Aviv, Israel. It offers cloud-based software to manage and deliver enhanced high-quality video streaming over the web to wireless gadgets and other mobile devices.
The company claims that its superior signal strength and proprietary jamming management technology help it to generate video quality that is superior to the likes of YouTube and Netflix (NFLX). RayV is valued at $40 million due to investments from Accel Partners, Argoquest Holdings LLC, Accrue Sports and Entertainment Ventures, Dragon Ventures and Metamorphic Ventures.
Yahoo! is trying to compete against Google (GOOGL) and its ubiquitous video platform YouTube by launching a much larger next-generation video website in the next few months. Google is up and away in the video segment with its user-generated YouTube platform. Moreover, its reported discussions to purchase Twitch, a live-streaming site, will help YouTube establish a foothold in the live-video streaming space.
If the deal materializes, it will help Yahoo! to strengthen its web video programming capabilities, which could also help its chances of generating advertising revenue.
Moreover, the latest move can help Yahoo! to expand its operations in Israel, as the Internet portal has had an R&D department in Tel Aviv since 2010. Yahoo! has previously purchased three startups namely Dapper, FoxyTunes and FareChase in Israel.
The Internet portal’s chief executive officer (CEO) Marissa Mayer has been trying to expand Yahoo!’s Internet-video services to attract customers as well as advertisers.
Recently, Yahoo declared the launch of two new comedy shows and an association with Live Nation (LYV) to broadcast a live concert every day for one year. Yahoo! has also been in talks with YouTube network Fullscreen Inc. and News Distribution Network Inc, a web video platform.
However, not all its efforts in video have been successful. Earlier, Yahoo! failed in its bid to acquire Hulu, an online TV show and movie streaming website and Dailymotion, a video streaming website.
Currently, Yahoo! holds a Zacks Rank #3 (Hold).
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