It's not the blockbuster that some industry analysts envisioned, but Yahoo Inc. has sealed its first deal under new Chief Executive Jerry Yang. Hoping to deepen its appeal to hard-core sports fans, Yahoo is buying Rivals.com, a Web site that provides extensive coverage of collegiate athletics.
Financial terms of the acquisition to be announced Thursday aren't being disclosed — an indication that the sales price is too small to dent Yahoo's finances. News Corp. paid $60 million for a similar Web site called Scout.com in 2005.
Analysts believe Yahoo may be considering more dramatic moves after changing its leadership earlier this week in its latest attempt to revive its sagging stock. Yahoo appointed Yang, its co-founder, to replace Terry Semel, its CEO of the past six years.
The wide-ranging suggestions about what Yahoo should do next have included bidding for Facebook Inc.'s popular online social networking site or combining with Internet auctioneer eBay Inc. or Microsoft Corp.'s MSN.com.
News Corp., a media empire controlled by Rupert Murdoch, reportedly has even offered to swap MySpace.com — the most trafficked social networking site — in exchange for a 25 percent stake in Yahoo. If it were consummated, the transaction would be valued at more than $10 billion, based on Yahoo's current market value.
For now, the Rivals.com deal will intensify Yahoo's competition with News Corp. since it already owns Scout.com.
Although Yahoo began negotiating with Rivals.com while Semel was still in command, the acquisition papers weren't signed until Yang's second day as CEO, said Scott Moore, a Yahoo senior vice president who oversees its news division. "Jerry is very excited about it," Moore said.
Both Rivals.com and Scout.com cater to obsessive sports fans who want to know every detail about their favorite college sports teams. The users of these sites typically are alumni of the colleges, major financial contributors to the athletic programs, or both.
Yahoo thinks Rivals.com will help fill some gaps in its sports section, Moore said. Besides following more than 100 colleges and universities, Rivals.com also follows high school sports to help identify the top prospects for athletic scholarships.
Brentwood, Tenn.-based Rivals.com generates most of its revenue from subscriptions that cost anywhere from just under $10 per month to just under $100 annually.
The site currently has about 185,000 subscribers, said Rivals.com CEO Shannon Terry, who will be retained by Yahoo. Rivals.com's 85 employees also are expected to be absorbed by Yahoo.
Rivals.com has been steadily growing since its 2001 inception, with its monthly traffic peaking at 2.57 million visitors last September with the kickoff of college football season, according to comScore Media Metrix. Scout.com attracted 2.29 million visitors during the same month, Media Metrix said.
Moore predicted Yahoo's broader reach will add "rocket fuel" to Rivals.com's growth. Yahoo's sports section drew 15.1 million visitors last month to rank second in the category behind ESPN's 17.6 million, according to Media Metrix.
Source:→ Yahoo NewsYahoo!, Deals, Rivals.com, College Sports Site