Yahoo! signs landmark deal with SBC

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Yahoo! has signed a deal with telecoms firm SBC Communications to develop a co-branded high-speed service, accelerating its move away from dependence on advertising. The dial-up service, expected to launch beginning in mid 2002, is claimed to be the first of its kind.

The agreement, which the firms described as a "landmark strategic alliance", could help it market more premium services, potentially including multimedia features such as music and movies.

For Yahoo!, the agreement provides monthly subscriber payments from SBC, promotion through SBC's sales channels, and the ability to offer premium services via SBC's communications and billing infrastructure - in the first instance, broadband internet access through SBC phone lines.

"Yahoo! believes the strength of this alliance will rapidly accelerate the growth of DSL in the broadband market, and we have partnered with the leading provider in the country," said Jim Brock, senior Yahoo! vice president. "As more and more consumers transition to broadband, we believe this alliance will position us to capture market share from our competitors."

In return, Yahoo! will offer SBC a share of its non-subscriber revenue on advertising, e-commerce and other premium portal services. But analysts remained unsatisfied that the SBC tie-up would represent a genuine source of revenue, or just one more vague alliance for the firm.

"The winner of the broadband war will be the company that delivers the best broadband-powered content, communication services and features to its customers," said SBC senior executive vice president, James S. Kahan. "Together, we'll provide Internet customers with superior information and communications services."

SBC

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