Internet colossus Yahoo! plans to enter the daily fantasy sports (DFS) business this summer.
After reporting an underwhelming Q1 profit of $21.2m on revenue of $1.23b, CEO Marissa Mayer announced that Yahoo! was embracing the “rising trend around daily fantasy games.” Touting the company’s 16-year history of offering season-long fantasy contests, Mayer revealed that Yahoo! believes it has created “a unique take on this [DFS] genre.”
Mayer made note of the fact that “normally, we do not announce products before launch but this has been such an area of interest for our fantasy players and our investors that we wanted to announce that we have a new daily fantasy offering in the works that will launch this summer.”
Yahoo!’s entry into the DFS arena will likely coincide with the arrival of Amaya Gaming’s new DFS product, which Amaya has pledged will be in place before the new NFL season kicks off. Both sites will provide a welcome counterweight to a market that was increasingly looking like the exclusive domain of FanDuel and DraftKings.
Those two firms have a serious head start, but Yahoo! could bite off a healthy chunk of the DFS market. As Mayer noted on the earnings call, “our users spend 30 billion minutes a year playing fantasy sports on Yahoo!,” so there’s a large pool of potential customers to convert. And there are definite visibility advantages that come with being owned by a major search engine.
Given its existing online profile, Yahoo! may be less inclined to compete with FanDuel and DraftKings for league and team sponsorships. But Yahoo! has extremely deep pockets, so it just may throw some cash around in order to push the other sites – neither of which has yet to turn a profit – to spend more time fundraising.