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Yahoo Paid Around $200 Million for Polyvore, a Search Engine for Fashion

Yahoo could end up coughing up around $40 million on top of that in employee retention payouts.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

Yahoo wanted to get in on the discovery commerce trend and paid up to get there.

The online media company paid around $200 million in cash to acquire fashion site Polyvore in an acquisition announced Friday, according to multiple sources familiar with the deal. Yahoo could end up coughing up around $40 million on top of that in employee retention payouts, one of these sources said. The companies did not disclose the sale price when it was announced last week.

The deal is a solid outcome for Polyvore, which launched in 2007 and has essentially become a visual search engine for clothing and outfits. The site’s most active users provide a ton of the content on the site by arranging images of clothing into outfits and sets of outfits. Some fashion brands pay Polyvore to feature their collections, while other brands pay to promote certain fashion trends or individual products. Polyvore also generates revenue through affiliate fees when one of its visitors goes on to buy an item found on Polyvore on another shopping site.

Nearly nine million people visited Polyvore’s websites and apps in June, up 36 percent from last June, according to comScore. That U.S. audience size puts it well ahead of other clothing-discovery properties such as Wanelo and Fancy, but still means it’s a fraction of the size of Pinterest, the largest visual search engine with some 76 million visitors. Pinterest recently announced that it is adding Buy buttons to its site, which will allow visitors to purchase certain items or articles of clothing directly through the Pinterest app. Pinterest’s move into e-commerce comes with challenges, but could give it another big leg up on Polyvore, which has so far refrained from letting its visitors make purchases directly through its website or app because of technological hurdles.

By tying up with Yahoo, Polyvore will undoubtedly see a boost in traffic through partnerships with sites like Yahoo Style and Yahoo Beauty. Yahoo has said in interviews with other outlets that it will also integrate Polyvore into its mobile advertising network. But Polyvore may never reach the potential it set out to if it doesn’t add a buying capability to its sites and apps.

Polyvore was founded by three former Yahoo employees, and CEO Jess Lee previously worked for Yahoo CEO Marissa Mayer when they both were at Google.

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