Orange Acquired Dailymotion For $168 Million By Buying Out Remaining 51% Stake [Update: Orange Confirms]

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Back in January 2011, Orange acquired 49 percent of Dailymotion for $78 million (€59 million), and declared that they wanted to buy out the remaining 51 percent. But Dailymotion had to wait two years before further talks. By spending $80.6 million (€61 million) for the remaining stake, Orange acquired 100 percent of Dailymotion for $168 million (€127 million).

Rumors have been circulating for months that Orange was finally ready to up its stake. The confirmation comes from its earnings documents. The deal was closed on January 10.

With 2.5 billion video views per month and 106 million unique visitors according to its latest public numbers, Dailymotion is a solid video sharing service, but far behind YouTube. When it comes to market share, it competes with Vimeo more directly than with YouTube. As video hosting consumes a lot of bandwidth, it’s hard to cover operating expenses with advertising.

Yet, the company has been profitable for a couple of years. Considered as the platform of choice in France, Dailymotion is very strong in other markets as well. In 2011, only 15 percent of its users were French. The U.S., Turkey, Japan and other countries are important markets as well.

Dailymotion’s immediate future will largely depend on whether Orange is ready to invest and support it. For instance, Orange has been key to Deezer’s expansion by bundling premium subscriptions in many mobile and Internet plans.

According to the AFP, Orange is currently looking for an American investor to buy out a small stake. The telecommunications company doesn’t want to stay the sole investor for long. While diversifying shareholders is a good financial decision, it also means that Orange probably doesn’t want to further integrate Dailymotion in its offerings and business units.

Update: An Orange spokesperson provided the following statement.

Since January 2013, Orange has increased its stake in Dailymotion to 100% (following an initial acquisition of 49% in April 2011). It is not our ambition or our role to remain a 100% stakeholder of Dailymotion and we are currently working to find the right partner/s. Obviously we cannot comment on this until a deal has been reached but it is clear that to accelerate the development of the company, Dailymotion needs to find a solid strategic partner, probably American, that is capable of opening the doors to the US market.

Beyond this, we are very happy with what has been achieved in the past few months (revenue growth of 55% in 2012). Our partnership with Dailymotion is an excellent illustration of the pertinence of our content strategy.