During an earnings call this week, Yahoo! CEO Melissa Mayer told investors that the company plans to enter the daily fantasy space with software developed in-house.
The announcement was made in the middle of the briefing with little fanfare and was first picked up by sportswriter Eric Fisher. The following were Mayer’s relevant remarks:
For more than 16 years we’ve built the best fantasy sports experiences for our fans. Our users spend nearly 30 billion minutes a year playing fantasy sports on Yahoo! and nearly all of those experiences have involved traditional season-long fantasy games. Recently there was a rising trend around daily fantasy games. We believe this is an area where Yahoo! can and should compete. Over the past year, we have been working hard to create our daily fantasy offering, a unique take on this game genre to bolster our leadership in fantasy sports. 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.
While arriving late to the DFS party, Yahoo will benefit from several advantages it holds over its competitors. The company is considered to be the largest provider of season-long daily fantasy games, a market which has been estimated at 41 million players. That means the Yahoo! product would hit the ground running with a built-in player base, and could be promoted throughout the web via Yahoo!’s myriad of digital properties.
The move comes as somewhat of a surprise, as some analysts thought that Yahoo! was looking to distance itself from the industry. In a piece posted for Forbes in March, Marc Edelman noted that Yahoo! had yet to announce the relaunch of its Pro Leagues contests, and highlighted the fact that the company had canceled its play-for-cash fantasy basketball leagues and closed its online Texas hold ‘em portal.
The news comes just weeks after iGaming giant PokerStars announced that it intended to enter the DFS market as well.
DraftKings recently cut a major deal of its own, announcing that Disney would invest $250 million into the company. In return, DraftKings has pledged to spend a whopping $500 million in advertising on Disney owned networks, such as ESPN.