paidContent - Could Yahoo Games Be Added To Garage Sale?

This story was written by Rafat Ali.
It’s already been reported that Yahoo’s “sell” list of non-core assets includes HotJobs, Yahoo (NSDQ: YHOO) Small Business and Yahoo Personals. Now you may soon add Yahoo Games to the list, according to our channel checks (analyst lingo for sources outside the company). While it is not for sale officially, like the above three are, they will consider it if they get the right offer for it. This would be a decently big one—until last month when its 19.2 million uniques came in slightly lower than EA, according to ComScore (NSDQ: SCOR), Yahoo Games has been the top gaming site for the past five years. Yahoo provided the usual response when we asked if the unit is for sale: “We dont comment on rumors or speculation.

With roughly 19.2 million unique monthly visitors, a Yahoo Games buyer would gain access to a staggering number of potential ad impressions and a variety of possible units: banners, pre-, post- and mid-roll video, as well as custom advergames. Yahoo cut deals with DoubleFusion and NeoEdge last year to serve and track some of the ads, so it’s not clear whether they’d stay intact for the new owner. Partnerships with companies like PopCap, Gogii Games and Big Fish provide access to hundreds of games. What it doesn’t include: Yahoo’s lucrative fantasy sports business, which is nestled inside Yahoo Sports. (Yahoo Games and Yahoo Sports are run by Kyle Lachlan, who reports to audience head Jimmy Pitaro.)

Who might buy? If News Corp (NYSE: NWS) wanted to loosen the purse strings (we’re not sure how much), Yahoo Games could fit with IGN Entertainment , which had 14.4 million unique visitors in June. IGN already provides some content to YG and together, it all could move to MySpace. On the retail side, Best Buy and GameStop are interesting possibilities. The best candidates are probably those who aren’t in the business or would see a major boost from the acquisition. MSN Games could break into the top five with an acquisition; ditto for AOL.

The problem however in valuing any of these properties off portals like Yahoo and AOL (NYSE: TWX), according to a source who looked at HotJobs and passed, is separating their inherent value from the traffic that the huge network throws at these properties. There is no guarantee how the traffic will fare (or fall off) once they are out of range of the giant Yahoo firehose. Even a traffic deal with Yahoo might not be long term, as the company tries to decide its own future (what with the MSFT deal about to happen anytime now).


The comScore Gaming Top Five / June 2009
1. EA 19.6 million UVs
2. Yahoo! Games 19.2 million UVs
3. Nickelodeon 17.6 million UVs
4. WildTangent 15.2 million UVs
5. IGN 14.4 million UVs

By Rafat Ali