Yahoo DFS, Day 3: Daily Fantasy Sports Appears To Be Unannounced Beta Testing

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Yahoo isn’t calling Wednesday’s launch of daily fantasy sports a “beta test,” but that is likely exactly what it is, as the Internet giant appears to be preparing for fantasy football, which is still two months away.

Yahoo, days 1, 2 and 3, at a glance

Yahoo surprised many by rolling out its daily fantasy sports product earlier this week, with little advance notice. While it did come a fair amount of fanfare, and a lot of media coverage, the instant conversion of huge swaths of Yahoo’s seasonlong players to daily fantasy didn’t really materialize.

After running two freerolls that filled on days 1 and 2, Yahoo also ran a $50,000 guaranteed prize pool contest — with an entry fee of $2 — that didn’t make it to half full. The contest had a maximum number of entrants of more than 28,000, but under 13,000 entered.

As of early Friday — often a pretty big day for DFS for Major League Baseball — Yahoo appears to just have guaranteed contests that total just $10,000. By contrast, DraftKings and FanDuel are both offering hundreds of thousands in guaranteed prize pools. Saturday’s slate of guaranteed contests on Yahoo (as of 1 p.m. Eastern on Friday) was $12,000.

While some have been disappointed with Yahoo’s launch, it appears really to be beta testing its product, not trying to compete with DraftKings and FanDuel immediately for the daily fantasy baseball market.

For Yahoo, perception equals reality

The problem, to some extent, has been perception. Yahoo just said they are in the daily fantasy sports business, point blank, on Wednesday. If they had called this a soft launch, or a beta test, expectations likely would have been ramped down.

Instead, expectations from players were for a totally finished product, which it seems clear the DFS platform is not. For example:

There have been plenty of other quibbles, mostly minor, from pricing for players in the salary cap structure to the scoring system to the mechanics of entering contests.

Clearly, a finished product is not what was intended. If it had been intended, we likely would have seen sizeable lead-up and promotion of the launch and probably a big guaranteed prize pool that DFS players couldn’t ignore.

Instead, Yahoo got some buzz with its launch, and had tens of thousands of players to at least try its product, to see what’s going right and what’s going wrong.

One has to imagine everything Yahoo is doing is aimed at having a robust, dialed-in platform for the NFL season in September; the opening game is exactly two months away.

Making it in the competitive market of DFS right off the bat is not a given, even for Yahoo — Eilers Research has predicted Yahoo might generate only about $5 million in revenue from DFS in 2015. In order to compete in the long-term, getting it right for the most important part of the year — football season — is likely Yahoo’s focus, right now.

Photo by Götz used under license CC BY-SA 3.0.