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What could a Daily Mail purchase of Yahoo mean?

The British tabloid is one of 40 companies reportedly considering a bid for the struggling Internet company, which has been under pressure from shareholders to revive its profits.

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    A Yahoo flag flies company's headquarters in Sunnyvale, Calif. British newspaper the Daily Mail is reportedly considering a bid for the struggling Internet company.
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The company that owns the British newspaper the Daily Mail is discussing a bid to take over Yahoo, a move that could have significant impacts for both companies.

The Daily Mail and General Trust, the British tabloid's parent company, has been discussing whether to offer a bid for the troubled Internet company with several private equity firms, The Wall Street Journal reports.

With a global website that covers a mix of celebrity news, scandals, and other aggregated stories, the Daily Mail has become one of the most popular news sites in the United States, with 66.7 million unique visitors in February, according to the analytics firm comScore. The same ranking has Yahoo at No. 3, with 204 million unique visitors.

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Yahoo has been under pressure for months from shareholders to revive its struggling fortunes.

Acquiring Yahoo, which boasts a variety of country-specific websites offered in local languages that have made it one of the most highly trafficked online companies, could help the Daily Mail expand its reach even further.

Last year, the newspaper acquired the news site Elite Daily, which bills itself as "the voice of Generation Y" and a competitor to sites such as Buzzfeed and The Huffington Post.

"Given the success of DailyMail.com and Elite Daily we have been in discussions with a number of parties who are potential bidders," a Daily Mail spokesman told the BBC, saying discussions were still at a "very early stage."

But the Daily Mail does not come without its own troubles, including recent lawsuits alleging false and defamatory coverage.

It has also faced questions about whether its aggressively headlined articles borrow too heavily from other media outlets and promote racist and sexist stereotypes, at times in articles without bylines or using anonymous sources.

"[T]he Mail's editorial model depends on little more than dishonesty, theft of copyrighted material, and sensationalism so absurd that it crosses into fabrication," James King, a former writer for DailyMail.com in New York wrote on Gawker last month.

The Daily Mail later sued Gawker, which recently rebranded itself as a politics-focused site, over Mr. King's account.

If the newspaper does offer a bid, it would join a variety of other companies interested in Yahoo, including Verizon, which acquired AOL last year in an effort to beef up its digital advertising business. The companies have until April 18 to make a preliminary offers.

The Mail’s bid could take two possible forms, according to The Wall Street Journal. In one scenario, the Daily Mail would take over Yahoo’s news and media businesses while a private equity firm acquired Yahoo’s core online operations.

In the second, the private equity firm would acquire Yahoo itself and merge the company’s media and news arms into a new company that included the Mail’s websites DailyMail.com and Elite Daily. The Mail would then run that business and get a large equity stake than in the first scenario, the Journal reports.

Some 40 companies have expressed interest in Yahoo, which boasts several popular sites, including a news site, Yahoo Finance, Yahoo Sports, and a video arm that's anchored by journalist Katie Couric.

In February, it shut down seven of its digital magazines, including sites focusing on parenting, food, and health and cut 15 percent of its employees.

So far, Yahoo executives have met with officials from Verizon, IAC Interactive, which owns such businesses as the Daily Beast and Dictionary.com, and CBS, according to the Journal. Yahoo executives haven't yet met with representatives of the Daily Mail.

While Mail Online's US ad revenue increased by 38 percent last year, acquiring Yahoo's mammoth digital advertising business could help it further offset declining revenues from print circulation and ads, writes Rory Cellan-Jones, a BBC technology correspondent.

But there could still be some stumbling blocks, he notes. "Buying a new business is one thing, getting its staff to share your vision and values quite another."

 
 
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