French minister says Yahoo wanted to "devour" website

Wed May 1, 2013 1:37pm EDT
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By John Irish and Leila Abboud

PARIS (Reuters) - France's industry minister said he had blocked Yahoo Inc's plan to buy a majority stake in online video website Dailymotion because the U.S. group wanted to "devour" its smaller competitor.

Yahoo, which declined to comment, had been in talks to acquire a 75 percent stake in Dailymotion, owned by France Telecom's Orange, a deal that would have valued Europe's largest video website at $300 million.

The failure of the talks makes for another public knock to France's business image after verbal attacks last year by Arnaud Montebourg on firms seeking to shut ailing industrial sites prompted international derision.

"I met the Yahoo and Orange chief executives in my office. Yahoo wants to devour Dailymotion, but we told them no and that it had to be a 50:50 split," Montebourg told Europe 1 radio.

France owns a 27 percent stake in France Telecom. French government officials had raised concerns that the country would lose control over one of its biggest Internet industry successes if the deal went ahead, sources familiar with the matter said.

Montebourg, one of the government's most outspoken ministers, is charged with restoring competitiveness to the industrial sector and promoting the "Made in France" brand.

He said that he had wanted Yahoo to follow a model similar to Renault and Nissan, whereby the identities of both firms were retained while they developed their products across the world.

"It's in the interest of France and Dailymotion, which is a golden nugget that needs to be preserved," he said.   Continued...

The Yahoo logo is shown at the company's headquarters in Sunnyvale, California April 16, 2013. REUTERS/Robert Galbraith