In early May, Apollo Global Management bought Yahoo and AOL from Verizon for $5 billion. It was part of a long struggle of Verizon to make Yahoo and AOL profitable against Google, Facebook, and Amazon. Unsurprisingly, Yahoo and AOL can’t beat the advertising prowess of Google, Facebook, and Amazon. Those companies generate goldmines of data that let advertisers target customers and reap high returns. Yahoo and AOL don’t have the intimate knowledge of their users to offer that same value. So, the acquisition is unsurprising.
However, there’s one piece of this that’s interesting. Yahoo isn’t just a search engine or a news aggregator. It’s also built a strong sports betting reporting site. Yahoo Sportsbook News covers sports betting news, lines, and highlights. It also has a partnership with BetMGM where Yahoo Sportsbook News acts as a content generator and BetMGM is the accompanying sportsbook. Bettors can read sports betting news on Yahoo, then place wagers on BetMGM.
Other companies have made the sports content and sports betting model work. theScore Media and Barstool Sports have integrated their sportsbooks and sports news. theScore focuses on its product while Barstool Sports leverages its content and influencer personalities. They’ve both found ways to meld their sports content and sportsbooks into profitable business models. However, Yahoo Sportsbook News and BetMGM haven’t found that same success together. That suggests that to make a marriage between sports betting and sports reporting work, online companies need to control the content and the sportsbook.
The Marriage Between Sports Reporting And Sports Betting
As sports betting became legal across the United States, sports news outlets began incorporating it into their coverage. Anyone who’s been out to a sports bar or a restaurant has probably seen game lines bordering shows on ESPN and other sports channels. Some shows even dedicate segments to sports betting highlights, which would’ve been unimaginable even in 2018. It took some time for sports betting to reach mainstream sports news coverage, but it was inevitable. If sports fans were into sports betting, then sports news outlets would’ve been hard-pressed to continue excluding it from their coverage.
With the new mainstream appeal, it’s easy to forget that not every marriage between sportsbooks and sports news is successful. Sports betting is a lucrative business. Giving bettors sports betting news–and hopefully tips–keeps bettors betting. It makes them more confident in their betting choices and keeps them on to make more wagers. Together, sports media and sportsbooks make a powerful team.
Why The Marriage Is Hard
The synergy between sportsbooks and sports news doesn’t guarantee success. Whatever business tries to pull the two together still has to be profitable. On the news side, it’s expensive to create content. Researching stories, writing them, then deciding whether they’re worth publishing is costly and time-consuming. On the sportsbook side, oddsmakers, lawyers, and IT professionals have to be paid just to get up and running. And that’s all before doing the math to maintain the sportsbook’s profitability.
The businesses probably aren’t equally profitable either. Sports news makes a lot of money from advertising, but sportsbooks make money from sports betting. Making them work together isn’t just about doing a good job on the content and sportsbook sides. It’s about designing a business that allows the content and the sportsbook to reinforce each other. Together, they can boost the profit margins of both businesses. But separately, they can be too draining to be profitable. That’s likely why Yahoo Sportsbook News couldn’t make it.
Where Yahoo Sportsbook News Likely Went Wrong
Companies don’t fail for single reasons, and Yahoo Sportsbook News isn’t any different. It didn’t have the goldmine of user data to offer exceptional value to advertisers. Even with its wide audience, it lacked the depth to compete against the tech giants. But one of the reasons it likely failed is because it didn’t get the same value from BetMGM as BetMGM got from it.
BetMGM has several large partnerships, including:
Those partnerships are in addition to its sportsbook’s operations. Multiple revenue streams make for a healthy business, and BetMGM seems to be doing well on that front.
However, Yahoo Sportsbook News didn’t have those same robust revenue streams. BetMGM bettors probably weren’t flocking to Yahoo Sportsbook News. There are plenty of news sources for bettors interested in sports betting analysis. Dedicated sports betting coverage can be lucrative. But anyone who’s watched a prime-time sports show has probably figured out that a lot of money comes from–you guessed it–advertisers, sponsors, and other partners. Yahoo’s portfolio of websites just didn’t attract enough attention to be profitable. It likely didn’t get as much out of the BetMGM partnership as BetMGM did.
What’s Next For Yahoo?
Yahoo Sportsbook News isn’t the only website that Verizon sold to Apollo. Verizon sold the full Yahoo and AOL portfolios. Although the final sale is still months away, we can guess what Apollo could grow Yahoo Sportsbook News into.
The Wall Street Journal reports that Apollo is authorized to conduct gambling in over 200 jurisdictions. With these capabilities, Apollo could create a Yahoo-branded sportsbook. That would improve the synergy between Yahoo’s sports news content and a sports gambling service. If Yahoo Sportsbook News sent people to a Yahoo branded sportsbook, it could boost traffic to both services. Both businesses could benefit one another, and Yahoo could become a profitable integrated sports news and sports betting platform.
In other words, it could be what Barstool Sportsbook and theScore Bet have built themselves into.
However, Yahoo also has a daily fantasy service. It’s not the giant that DraftKings or FanDuel have built themselves into. However, it could be the first step into creating a profitable and sustainable business model for Yahoo. Even though it’s not sports betting, daily fantasy sports are a great first step into it. Apollo could use its resources to boost Yahoo’s daily fantasy product. After that, it could direct daily fantasy traffic to Yahoo Sportsbook News. In turn, Yahoo Sportsbook News could funnel readers toward the daily fantasy site. That would be the most logical first step toward Yahoo’s rehabilitation.
But that remains speculative. The deal isn’t expected to go through until the end of 2021. So, we have well over a year or two before we see Apollo’s plans for Yahoo Sportsbook News come to fruition. However, they’ll be reworking the entire portfolio of Yahoo and AOL’s digital assets. While we’re focused on the sports betting news, Apollo has larger plans in store for its latest Verizon products. Anyone curious about what old sites like Yahoo and AOL can do on today’s internet should watch what Apollo does to them.