Yahoo has come up with a new strategy that could help revive the struggling Internet company's fortunes: give users the chance to win cash.
Yahoo launched a daily fantasy sports service on Wednesday, tapping into a new revenue source that could expand its presence in the multi-billion dollar fantasy sports industry.
The new service, called Yahoo Sports Daily Fantasy, allows users to win cash rewards by participating in daily fantasy sports games. Yahoo has long been one of the leaders in fantasy sports in which users compete throughout the duration of a season for fun and for bragging rights. But it's never allowed users to win money on its games until today.
"Today, we're taking the game to the next level and giving fans what they've always wanted — the chance to compete with their friends and win cash, everyday. With today's launch, Yahoo becomes the first major sports site and the only technology company of its scale to offer its own Daily Fantasy experience," Yahoo wrote in a statement.
The new daily fantasy league is already up and running on Yahoo. It's also available through a standalone iOS app, or through any mobile browser, it said.
Fantasy sports are online games that allow users to put together their own imaginary teams comprised of real players, and win points based on the players' real-game performances. It's one of the most popular online activities with a user base of roughly 56 million in the US and Canada alone, and is estimated to be at least a $4 billion industry, according to STATS.
The new fantasy sports games could help attract new users to Yahoo, a 21-year-old Internet pioneer which has struggled to attract users and advertisers at the same rate as competitors such as Facebook and Google.
While sports gambling is illegal in all but four states, placing money on fantasy sports is considered legal in most states because of a law called the Unlawful Internet Gambling Enforcement Act. The law basically classifies fantasy sports as a "game of skills," not a "game of chance," which has spawned the creation of multiple daily fantasy sports sites, including the near $1 billion-valued DraftKings and FanDuel.
Today's news shouldn't come as a complete surprise to those who've followed Yahoo in the past. During her last earnings call, Yahoo CEO Marissa Mayer said users spend more than 30 billion minutes on Yahoo's fantasy sports sites annually, and hinted at a summer launch of a daily fantasy service.
"Normally we do not announce products before launch but this has been such an area of interest for our fantasy players and our investors that we wanted to announce that we have a new daily fantasy offering in the works that will launch this summer," she said.
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