France Telecom's Dailymotion, an online video-sharing website, must not remain exclusively French and all options need to be studied, the junior minister for digital economy, Fleur Pellerin, told French media on Sunday.
Last week, Industry Minister Arnaud Montebourg said he had blocked Yahoo Inc's plan to buy a majority stake in Dailymotion because the U.S. group wanted to "devour" its smaller competitor, prompting another row over political interference in French companies.
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"We don't live in a closed economy. The digital economy is not a Gallic village," Pellerin said in an interview in French weekly Journal Du Dimanche. But she said the company, its technology, engineers and jobs must remain anchored in France.
Yahoo had been in talks to acquire a 75 percent stake in Dailymotion, owned by France Telecom's Orange, a deal that would have valued Europe's largest video website at $300 million.
Pellerin said the deal with Yahoo was not balanced enough and would have led to the disappearance of Dailymotion, but she said it would be an economic and industrial dead-end for Dailymotion to remain exclusively French.
"Our gems are struggling to grow. They need help," Pellerin said. "If this requires a tour with funds from Silicon Valley alongside Orange acting as a reference, this is not a problem for me," she said. "All the options need to be studied."
The failure of the talks is another blow to France's business image after verbal attacks last year by Montebourg on firms seeking to shut ailing industrial sites prompted international derision.
(Reporting by Muriel Boselli; Editing by Hugh Lawson)