Yahoo is reportedly closing in on a deal to acquire video streaming startup company RayV Inc., according to sources that are familiar with the proposed acquisition.
If the acquisition pushes through, Yahoo will be able to bolster its young Screen video service as the company will use RayV's technology to improve Screen.
The planned acquisition is just one of the several deals on Web video that Yahoo CEO Marissa Mayer has engineered in recent months. Mayer is looking to build up Screen into a worthy competitor to Google's YouTube.
Since Mayer assumed her role as CEO in 2012, she has made it a priority to improve Yahoo's video services to attract users and advertisers. Mayer employed journalist Katie Couric as Yahoo's global anchor, and last month, the company revealed two new comedy shows headlined by celebrity directors, along with an agreement with Live Nation for the rights to stream one live concert per day for one year.
Last year, Yahoo did not succeed in acquiring video website Dailymotion and TV portal Hulu. This year, the company has been involved in discussions for acquisition deals involving online video services Fullscreen Inc. and News Distribution Network Inc.
RayV offers a cloud-based platform to encode, deliver and monetize Web and mobile video. Founded in 2006, the company began by developing their own software to improve streaming for high-definition video. RayV's software line-up currently includes a network for content distribution and a system for content management and digital rights management, which it uses to service clients which include content providers, mobile operators and telecommunications companies.
RayV also boasts of signal strengths that are superior compared to the signal strengths of YouTube, which would greatly increase Screen's performance.
The company has received more than US$40 million from its investors, which include Accel Partners, Accrue Sports, Argoquest Holdings LLC and Entertainment Ventures, Dragon Ventures and Metamorphic Ventures.
In addition to improving Screen's services, the acquisition of RayV will also expand operations in Israel for Yahoo. While RayV is based in Los Angeles, the company has a research and development arm in Tel Aviv, where Yahoo also has a research and development center. In addition, Yahoo has previously purchased three Israeli startup companies: Dapper, FareChase and FoxyTunes.
The terms of the proposed acquisition deal have not yet been determined. A Yahoo spokeswoman declined to provide any comments, while RayV co-founder Omer Luzzatti did not immediately respond to requests for comment.
