Yahoo Acquires Online Contest Site Bix

In the fast-paced search for a winning concept, Internet search portal Yahoo has acquired Bix, an online contest site just unveiled in August. The deal comes just one month after Yahoo rival Google bought video-sharing site YouTube.

Bix allows both users and advertisers to post content. The feature has drawn the interest of advertisers, such as Six Flags, which sponsored a contest asking for the best roller-coaster-like scream.

Company founder Mike Speiser, who also co-founded the user polling site Epinions.com, announced the deal Thursday in an open letter to Bix users.

According to Yahoo spokesman Terra Carmichael, integration of Blix and its one million users provides Yahoo “huge potential for integration,” starting the first quarter of 2007.

Although terms of the deal weren’t disclosed, the benefits were clear to Speiser.

“It means that every performer on Bix will be performing on essentially the world’s largest stage with a potential audience in the hundreds of million,” Speiser told his users.

According to reports, Speiser will become a Yahoo vice president in charge of community sites, such as Yahoo Groups or Yahoo 360.

“Yahoo 360 hasn’t taken off like they [Yahoo] wanted,” Mukul Krishna, digital media industry analyst at Frost & Sullivan, told internetnews.com. “Yahoo sees itself loosing out to Google and overshadowed by its rival’s recent purchase of YouTube.”

Krishna said how well Yahoo maximizes the Bix buyout depends on how quickly the company integrates the contest site’s features with existing properties, such as Flickr
or Yahoo 360.

“You need to be very aggressive about intelligent acquisitions and immediate rollout,” Krishna said.

For companies looking to exploit the community-generated content area, a key analogy is World War I, the analyst suggested. Then, he said, aircraft were obsolete soon after rolling out of the hangar.

That need for immediate action draws Yahoo and other companies to startups like Bix and YouTube.

“People are trying to buy ideas and to combat competition,” Krishna said, adding companies looking for added ammunition will often snap up new firms with intriguing ideas.

Krishna predicted Google or MSN will make a counter-move in the coming weeks.

“MySpace is biting at the heels of these guys and everyone is trying to be the next MySpace,” he said.