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Yahoo acquires Player Scale

The new management at Yahoo continued its recent streak of aggressive acquisitions today, buying California-based gaming startup PlayerScale. PlayerScale develops software that makes cross-platform gaming easier. PlayerScale says it now is host to over 150 million players online. That represents a 50% increase in half a year, if earlier reports are accurate. Financial details of the transaction were not disclosed.

Yahoo has said it intends to retain seven members of the PlayerScale staff. The company was reported to have 14 employees. PlayerScale’s management has said the website is adding 400,000 new users each day. PlayerScale’s target audience is casual gamers who use social networking sites, especially using mobile phones. This is a highly competitive space dominated by Zynga and its close relationship with Facebook.

The PlayerScale acquisition comes just days after Yahoo acquired the popular blogging website Tumblr. The Tumblr deal was reported to be worth $1.1 billion dollars. Yahoo acquired the to-do list app company Astrid at the beginning of May. Yahoo also surprised many internet industry analysts with its acquisition of Summly, an app that provides article summaries. And Yahoo recently announced a major makeover for its Flickr photo sharing website, one of Yahoo’s oldest and most popular acquisitions, dating back to 2005.

Yahoo has been on a bit of a tear since the arrival of new CEO Marissa Mayer from Google, Yahoo’s largest direct competitor. Yahoo has also been noted for aggressively shuttering a number of the websites of the companies it is acquiring. Most of the acquisitions appear to be aimed at taking control of technology and code, rather than brands and users.

Yahoo has said that in the case of PlayerScale that it intends to keep the service running in its current form. The big get for Yahoo in the PlayerScale deal is the company’s Player.IO product.

The move into casual social gaming on mobile devices is not entirely unexpected. Zynga, the powerhouse of the social gaming world, has stumbled badly since its initial public offering last year. Zynga has shuttered a number of popular games and has witnessed a backlash from users. PlayerScale’s user base represents an opportunity for Yahoo to hedge its bets on an increasingly social future for the internet. It also moves Yahoo away from direct competition with Google. The search giant has no exposure in the social gaming section of the internet.

PlayerScale CEO Jesper Jensen tried to reassure users that the acquisition is solely beneficial for them. On a posting to the company’s website, he expressed his enthusiasm for the deal, saying, “We will continue to support our existing product and deliver new services to help you grow and manage your success in cross-platform gaming — whether it’s casual, social or mobile.” Jensen called the move a major milestone for the startup that he helped found in 2009. He noted that the company will not be shutting down any services and will continue to expand its user base in the months to come.

Yahoo’s stock (Nasdaq ticker symbol YHOO) saw a decline of slightly under 2% for the day of the announcement. Trading volume in Yahoo stock was heavier than average. The decline comes in a mixed day of trading overall for the stock market. The company has seen a marked improvement in the price of its stock since Mayer assumed the helm. Investors have given Yahoo management their stamp of approval. The stock has seen a nearly 70% rise since Mayer took over.


Kate Simmons is a freelance writer and occasional blogger on internet-related topics. In her writing, she focuses on social media marketing, online advertising advice for small businesses, and social media’s increasing role in everyday life. Currently she is writing for local providers.

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