Yahoo! has acquired online video platform provider Maven Networks for $160 million, mainly in cash. Yahoo!, which has been losing ground against Google and has been subject to an acquisition bid from Microsoft, plans to invest further in the Maven platform and combine it with its own advertising network. Based in Cambridge, Massachusetts, Maven will become a wholly owned subsidiary of Yahoo!

Yahoo! has meanwhile rejected an unsolicited $44.6 billion bid from Microsoft. Both companies are struggling to respond to the emergence of Google as dominant online player. Against this background, the acquisition of Maven Networks for a mere $160 million almost seems a bargain.

Founded in 2002, Maven provides services to manage and distribute online video for over 30 major media companies. The company started mainly as a technology platform but has evolved to enable video providers to earn revenue through syndication and advertising. As part of Yahoo! the company will benefit from its established relationships with advertisers.

Hilmi Ozguc, the chief executive of Maven Networks, said that “by combining our capabilities with Yahoo!’s own technology resources, publisher and advertiser relationships, and vast audience reach, we will deliver an unmatched video content syndication and advertising solution to the market.”

The founder of the start-up broadband video company said that the market is increasingly going to be a game fought between titans as billions of dollars are at stake.

“When I co-founded Maven Networks it was with a singular vision that video would be critical to the future of the internet,” he said in a note on the company web site. “The combination of Maven Networks with Yahoo!’s own vast technology resources, deep industry relationships, and huge global audience will deliver an unrivalled video publishing, syndication and advertising solution.”

“This deal makes great sense for Yahoo! to further grow its multi-billion-dollar advertising business, as its advertisers and publishing partners are looking for more advanced and highly scalable video solutions,” he continued. “The Maven platform will now be serving an audience size that is unparalleled, 500 million visitors every month around the world, and be at the disposal of a premium roster of advertisers and publishers.”

Hilary Schneider, who heads global partner solutions at Yahoo!, said: “Video is projected to be the fastest growing segment of the online ad market, and Maven will significantly help advance Yahoo!’s strategy, expanding the video opportunity for publishers and increasing the efficiency and effectiveness for advertisers. This is a big win for publishers, advertisers, consumers and for Yahoo!”

Forrester estimates that the online video advertising in the United States will grow to more than $4 billion in 2011.

News that Yahoo! was planning to buy Maven had been circulating for some weeks. The acquisition is one of the largest broadband video deals to date and points to the possibility of further consolidation in the market.

Brightcove, also based in Cambridge, Massachusetts, with a similar business model to Maven Networks, could be another possible acquisition target.

www.maven.net
www.yahoo.com