Yahoo boss Marissa Mayer is considering plans to buy a cable network like CNN or Scripps to save the struggling Internet giant,
Business Insider reports.
Yahoo is set to cash in on the paper fortune it has made since the initial public offering last year of Alibaba, the Asian firm in which Yahoo has had a major holding for 10 years.
Its primary target is said to be the Scripps Network, the parent company of seven cable channels, including HGTV, the Food Network, and the Travel Channel.
After Yahoo began talks to buy just the Food Network, Mayer expanded the company’s plans to acquire Scripps in its entirety, sources told Business Insider.
A media industry source close to Yahoo executives told the website there’s been "pretty active" speculation that Mayer, the chief executive officer, is also interested in making an offer for Time Warner’s CNN, which could sell for around $5.5 billion.
Yahoo’s interest in Scripps stems from the fact that the two companies already have some symmetry based on “brand-friendly content" that could lead to a fairly seamless takeover or merger.
Food Network shows are often timely some years after they have first aired, and thus would be worth sponsoring for advertisers in 2015, according to Business Insider, which noted that Yahoo’s share of digital ad revenue has been taking a hit in recent years.
Yahoo could also distribute the original content it's now producing across the various Scripps channels, while its sales force would be able to bundle TV ads with Web ads and charge higher rates, the report said.
Earlier this week, Tom Dotan outlined on
The Information the reasons he thought a merger between Yahoo and CNN in the near future was “preordained."
"Media companies are struggling through a prolonged cycle of decreasing ratings and a fear that the stagnant ad marketplace will soon plummet," he wrote.
"For cable channels, the business of making money from carrier fees is long past its peak, and most are scrambling to develop digital strategies involving delivering video over the Internet that can at least reach some of the audience they’ve lost."
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