Zut alors! French Government Says "Non Merci" To Yahoo's Dailymotion Deal

The $200 million deal, which would have given Yahoo a controlling stake in Dailymotion, is now off.

Last month it was widely reported (though, as with all big tech firm takeover news, top secret squirrel, chaps) that Yahoo was close to inking a deal with video-sharing site Dailymotion. Whatever deal might have been on the books (as I said, top secret squirrel), it is now off--and for that, you can blame the French State.

Dailymotion is part-owned by France Telecom/Orange, the former state-run telecommunications corporation with an interesting skunkworks. Interesting skunkworks aside, the problem lies with the French government's reticence to see one of its flagship tech firms have a U.S. firm take a controlling stake. And France Telecom/Orange, being 27% state-owned, was pressured by France's Minister of Industrial Renewal, Arnaud Montebourg, to keep Dailymotion French-controlled.

This is what a source said about the developments:

"Dailymotion is considered a marquee company in France's technology industry. Hence Montebourg didn't want to let it go to the Americans. He wanted anchorage (insert Alaska joke here) to stay in France. It's a shame because all the growth at Dailymotion is international. It would have been in the best interests of the company. It's stunning, really."

The collapse of the deal is a blow for both parties. Marissa Mayer, who has long been looking for ways to build Yahoo's mobile platform, and who last week announced a content deal with Saturday Night Live, will have to find another video platform--and sharpish.

(As a side note, Yahoo just released a new Android app, updated to incorporate last month's acquisition of the Summly news service. It's currently only available in the U.S.)

And for Dailymotion, who needed investment--to the tune of around $65 million--to compete with the YouTubes of the tech world, the red light means it will have to find either a French buyer or hope the government (already strapped for cash) will inject some cash.

Where should Marissa be looking next? Or do you think she's going to have to rethink her strategy as there are no alternative candidates? Tell us what you think in the comments.

[Image via Wikimedia]

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