Yahoo is reportedly close to investing $10bn in popular photo sharing app Snapchat, as the embattled internet giant continues its focus on mobile services to compete with the likes of Google and Facebook. Watch this video from Bloomberg discussing the potential deal: pioneer ‘unlock’ value for shareholders. According to a report in the Wall Street […]
Yahoo is reportedly close to investing $10bn in popular photo sharing app Snapchat, as the embattled internet giant continues its focus on mobile services to compete with the likes of Google and Facebook.
Watch this video from Bloomberg discussing the potential deal:
pioneer ‘unlock’ value for shareholders.
According to a report in the Wall Street Journal, Yahoo is the lead investor in the financing and set the terms of the round.
The paper cited a source close to the deal who asked not to be identified because the information is private.
Venture capital firm Kleiner Perkins Caufield & Byers has also invested as part of the Snapchat funding, people with knowledge of the matter have said.
Alibaba investment still paying off for Yahoo
Yahoo has plenty of cash to invest following its 2005 investment in recently floated Alibaba ecommerce firm.
Yahoo paid $US1 billion ($A1.08 billion) for a 40 per cent stake in Alibaba that has paid back the investment many times over.
Unconfirmed reports surfaced earlier this year indicating that Chinese e-commerce giant Alibaba had been considering investing in Snapchat.
Snapchat rocketed to popularity, especially among teens, after the initial app was released in September 2011.
Created by then Stanford University students, the app allows the sending of text and photo messages that disappear seconds after being viewed.
The company had last year rejected a buyout offer from Facebook, judging the $US3 billion ($A3.25 billion) offer too low, US media reports have said.
Snapchat has also been courted by other investors and would-be buyers, including a group led by Chinese internet giant Tencent.
Mobile strategy to compete with Google
Yahoo separately also agreed to buy mobile-chat platform MessageMe. The deal was for less than $12 million, said people familiar with the situation.
The moves continue an acquisition and investment tear that Yahoo has embarked on under Chief Executive Officer Marissa Mayer.
Mayer has been striving to re-invent the company as an online venue for premium, personalised content after its internet search service crown was taken by Google. As a result, Yahoo is working to build up its offerings in areas such as mobile and messaging that are attracting many new users.
The company is under increasing pressure to reveal how it plans to shore up its core online advertising business, with activist investor Starboard Value LP last month pushing Yahoo to stop making acquisitions and to consider breaking itself up or combining with AOL Inc.
Activist investment firm Starboard Value meanwhile urged Yahoo last week to explore a tie-up with online rival AOL, saying such a deal could help the struggling internet
