Will Yahoo be fine if Daily Fantasy Sports fail?

Will Yahoo be fine if Daily Fantasy Sports fail?

This year has seen tech giant Yahoo throw their hat into the daily fantasy sports (DFS) arena. Although new to the industry, Yahoo Sports Daily Fantasy has already risen to become the third-largest DFS site behind FanDuel and DraftKings. But with the latter two facing legal challenges in New York and the entire DFS industry in jeopardy, could Yahoo! lose out on a substantial investment?

Popular Science recently discussed this very topic and if Yahoo would be severely hurt by a DFS collapse. And they offer a mixed view of the challenges facing Yahoo if DFS were to lose legal challenges in New York and potential cases in other states.

“Yahoo, for its part, told The New York Times that its profit is not dependent on the daily sports gaming revenue,” Popular Science reported. “So if the well dries up, they’ve got others already drilled. But that might not be the revenue stream in jeopardy; while direct profits from gaming could be neglected, the page views and time spent on the site account for significant amounts of traffic, and traffic equals money.”

However, even if Yahoo were to see DFS outlawed in many states and their investment ruined, they’d likely be fine in the aftermath. Popular Science covered this angle too with the following:

“Yahoo executives have said that the company largely got into sports gaming as a way to drive traffic back to its larger fantasy and sports offerings. And what’s more, if competitor sites are cut off from revenue streams, Yahoo would likely benefit from their larger offering, and would likely capture audience if they changed their program to a points program instead of dollars earned.

“That would mean that the profit would come from page views and ads, a strategy for income that one-trick competitors wouldn’t necessarily be able to sustain.”

Yahoo is a giant in the season-long fantasy sports industry, where they boast some of the most-popular leagues. And they’ve been trying to integrate this huge fanbase into the daily fantasy sector too. But if the latter doesn’t pan out, then, as Popular Science suggests, they have other ways to monetize the activity. Assuming this doesn’t work, well, the company as a whole should be more than fine since they boast the world’s fifth-most visited website.