Yupi Internet

11 Pages Posted: 21 Oct 2008

See all articles by Dana Clyman

Dana Clyman

University of Virginia (UVA), Darden School of Business (deceased)

Rodney Davis

affiliation not provided to SSRN

Timothy Plankey

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Abstract

This case is part of a three-party negotiation (see also UVA-QA-0577 and UVA-QA-0578). The three parties are Yupi Internet, Quepasa.com, and Sony Corporation. Sony is searching for a partner in the Hispanic and Latin-American portal space to carry its content in order to boost music sales. Sony is offering a variety of combinations of content and promotional support to the portals. A fascinating characteristic of this negotiation is that it is unclear whether the portals will pay Sony for access to its content or whether Sony will pay the portals for access to their audiences. The case is set up for Sony to get the two portals bidding for the contract. But the most value can be unleashed for all parties (including Sony) if the portals can get together in a merger or joint venture and do one deal with Sony.

Excerpt

UVA-QA-0576

Version 1.4

YUPI INTERNET

It was late 1999, and Yupi's Board was up in arms. Yupi's cash-on-hand would only support another two-and-a-half months of operations. Negotiations for another round of venture-capital funding were a month away, and typically negotiations took at least a month to finalize. To add to its difficulties, Yupi had a unique opportunity to secure high-quality content from Sony Corporation of America but no money with which to buy it. Nevertheless, the company desperately needed to continue adding unique content to its Web site in order to increase site traffic, build brand awareness, and increase the company's valuation prior to the next funding round and ultimately the Initial Public Offering from which everyone hoped to get rich.

At a meeting of the Board, one of the Directors posed the question of how much Yupi could afford to pay for the content, if it came down to that. The response was immediate. The Board expected Yupi to sell access to its customer base, rather than pay for the content. Content, after all, was a commodity. Nevertheless, after much discussion, it was decided that, if absolutely necessary, Yupi could spend up to $ 800,000 to secure Sony's rather unique content, but not one penny more. The Board was deeply concerned about Yupi's falling below two months of cash-on-hand, and it ended the meeting by reaffirming its position that rather than buy the content, Yupi should sell access to its audience. The negotiating team charged with doing the deal was not willing to test the Board's resolve on this point.

Yupi Internet

. . .

Keywords: internet, negotiation, mutiparty negotiations, e-business UVA-QA-0576

Suggested Citation

Clyman, Dana and Davis, Rodney and Plankey, Timothy, Yupi Internet. Darden Case No. UVA-QA-0576, Available at SSRN: https://ssrn.com/abstract=1283445 or http://dx.doi.org/10.2139/ssrn.1283445

Dana Clyman (Contact Author)

University of Virginia (UVA), Darden School of Business (deceased)

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Rodney Davis

affiliation not provided to SSRN

No Address Available

Timothy Plankey

affiliation not provided to SSRN

No Address Available

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
10
Abstract Views
545
PlumX Metrics