Web Portal Giant Pursues Grand Ambitions in Broadband Content Space
NOVEMBER 01, 2005
By Alan Breznick, editor, Cable Digital News
Yahoo! Inc. is getting positively greedy. Not content to have formed broadband content partnerships with SBC Communications, Softbank, Rogers Cable, British Telecom, Verizon Communications and now BellSouth Corp. over the past couple of years, Yahoo is aggressively seeking to team up with other large phone and cable companies around the world.
Yahoo Chairman & CEO Terry Semel spelled out the Internet portal giant's ambitious intentions last month. Speaking to financial analysts and reporters during the company's third quarter earnings call, Semel said the company wants to boost its online revenues further by developing new broadband products and services and, especially, by forging fresh broadband alliances.
"These relationships open up additional channels in which we share premium services today and provide an opportunity for possible future monetization opportunities tomorrow," Semel said. He said Yahoo, which already enjoys a potential reach of more than 21 million DSL and cable modem subscribers on three continents, is eager to reach still more Internet users through additional alliances with broadband service providers.
Yahoo executives declined to identify the broadband providers or the markets that they might be targeting for expansion. But some inviting targets include Qwest Communications International, the last of the four major Baby Bells in the U.S. not to ink a deal with Yahoo, and Shaw Communications, Canada's second largest MSO after Rogers. Several U.S. cable operators might be possibilities too, depending upon how exclusive Yahoo's existing deals are with SBC, Verizon and BellSouth.
"We look for the right partners," said a Yahoo official. "It could be a phone company or a cable company... We're having conversations in a lot of different places."
Representatives of several major U.S. MSOs -- Cox Communications, Charter Communications and Cablevision Systems -- said they're not aware of any pending content integration pacts with Yahoo. Comcast Corp. and Time Warner Cable officials didn't return calls by press time.
In a separate but related broadband content move, Yahoo is also mulling a bid for a stake in Time Warner's America Online Internet unit, according to various press reports. Yahoo apparently jumped into the fray last month after Microsoft, Google and Comcast all opened talks with Time Warner about buying at least a chunk of AOL, which has suddenly re-emerged as a hot property in the Web content market. Among other possibilities, Comcast and Google are reportedly weighing a joint investment in AOL.
But it's not clear yet how serious the discussions between Time Warner and Yahoo are. Yahoo and Time Warner have declined comment so far on any negotiations between them.
Yahoo's broadband expansion drive comes as the Web portal firm continues to rake in big bucks from the Internet. The company reported last month that its revenue skyrocketed to more than $1.3 billion in the third quarter, up 47% from the year-ago period, largely thanks to a 46% surge in online advertising sales to nearly $1.2 billion.
Besides the strong ad sales performance, Yahoo saw its fees from premium online offerings, such as broadband content features bundled with high-speed Internet access, jump 55% to $170 million. The company now boasts 11.4 million premium subscribers, up from 7.6 million a year earlier.
"Yahoo has continued its run of exceptional growth," Semel told analysts during the company's earnings conference call last month, according to the Wall Street Journal.
Indeed, even if it doesn't gain a stake in AOL, Yahoo is clearly making its mark in the broadband content business. In its most recent move, the company announced plans with BellSouth last month to deliver co-branded high-speed Internet service to the Bell's nearly 2.7 million FastAccess DSL subscribers at no extra charge, starting late next year. As part of that deal, Yahoo will offer customized Web browsing, personalized broadband home pages, a premium-level Internet radio service, access to a large catalogue of music videos, digital photo features, and news and entertainment content.
The announcement of the BellSouth pact came just a month after Yahoo launched a similar co-branded high-speed Internet service with Verizon, known as Verizon Yahoo! for DSL. The two partners also introduced a new, lower-speed, lower-priced DSL service that largely matches a similar service already offered by SBC and Yahoo. And they plan to launch another co-branded product for subscribers of Verizon's new, fiber-rich FiOS service.
As a result, Yahoo has now secured broadband content integration deals with the three biggest Bells in the U.S., granting it access to 92% of the 16 million-plus DSL subscribers in the nation. In fact, Yahoo has now supplanted Microsoft's MSN service as the main content partner for the three biggest telcos, leaving only Qwest primarily in MSN's hands.
Yahoo has not inked a broadband content integration deal with a major cable operator in the U.S. yet. But it does have an agreement with Rogers, the largest MSO in Canada. That pact, concluded in early 2004, offers a number of high-speed features and applications to Rogers' 1 million or so cable modem subscribers, including customized Web browsing, personalized home pages, enhanced e-mail, virus protection, spam control, enhanced instant messaging, parental and security controls, digital photo tools, online music services, online games and video services.
Rogers officials have expressed satisfaction with the results of their alliance with Yahoo so far. But they weren't available to discuss the results in detail last month.
As evidence of their success, Yahoo executives point to their partners' ability to sign up droves of new broadband subscribers. In particular, SBC has enjoyed some record-breaking DSL customer gains since hooking up with Yahoo.
Yahoo officials also argue that they've helped their broadband partners cut subscriber churn rates. Plus, they contend, their partners' customers use more broadband features and spend more time online.
In Yahoo's boldest move yet on the broadband content front, it's holding preliminary talks with Time Warner for a stake in AOL. Quoting anonymous sources, press reports have characterized the discussions between the two media companies as "informational."
A bid for AOL makes great sense for Yahoo, especially as a defensive strategy. The Internet firm would love access to AOL's huge treasure trove of free and premium content, as well as access to the huge online audience that AOL still commands. Furthermore, Yahoo would dearly love to keep AOL out of the hands of its two biggest Web rivals, Microsoft's MSN service and Google.
But Microsoft and Google, either on their own or in partnership with Comcast, appear to have the upper hand in the negotiations so far. Like Yahoo and Time Warner, Google and Comcast have declined comment on the discussions.
http://www.cabledatacomnews.com/nov05/nov05-6.html
NOVEMBER 01, 2005
By Alan Breznick, editor, Cable Digital News
Yahoo! Inc. is getting positively greedy. Not content to have formed broadband content partnerships with SBC Communications, Softbank, Rogers Cable, British Telecom, Verizon Communications and now BellSouth Corp. over the past couple of years, Yahoo is aggressively seeking to team up with other large phone and cable companies around the world.
Yahoo Chairman & CEO Terry Semel spelled out the Internet portal giant's ambitious intentions last month. Speaking to financial analysts and reporters during the company's third quarter earnings call, Semel said the company wants to boost its online revenues further by developing new broadband products and services and, especially, by forging fresh broadband alliances.
"These relationships open up additional channels in which we share premium services today and provide an opportunity for possible future monetization opportunities tomorrow," Semel said. He said Yahoo, which already enjoys a potential reach of more than 21 million DSL and cable modem subscribers on three continents, is eager to reach still more Internet users through additional alliances with broadband service providers.
Yahoo executives declined to identify the broadband providers or the markets that they might be targeting for expansion. But some inviting targets include Qwest Communications International, the last of the four major Baby Bells in the U.S. not to ink a deal with Yahoo, and Shaw Communications, Canada's second largest MSO after Rogers. Several U.S. cable operators might be possibilities too, depending upon how exclusive Yahoo's existing deals are with SBC, Verizon and BellSouth.
"We look for the right partners," said a Yahoo official. "It could be a phone company or a cable company... We're having conversations in a lot of different places."
Representatives of several major U.S. MSOs -- Cox Communications, Charter Communications and Cablevision Systems -- said they're not aware of any pending content integration pacts with Yahoo. Comcast Corp. and Time Warner Cable officials didn't return calls by press time.
In a separate but related broadband content move, Yahoo is also mulling a bid for a stake in Time Warner's America Online Internet unit, according to various press reports. Yahoo apparently jumped into the fray last month after Microsoft, Google and Comcast all opened talks with Time Warner about buying at least a chunk of AOL, which has suddenly re-emerged as a hot property in the Web content market. Among other possibilities, Comcast and Google are reportedly weighing a joint investment in AOL.
But it's not clear yet how serious the discussions between Time Warner and Yahoo are. Yahoo and Time Warner have declined comment so far on any negotiations between them.
Yahoo's broadband expansion drive comes as the Web portal firm continues to rake in big bucks from the Internet. The company reported last month that its revenue skyrocketed to more than $1.3 billion in the third quarter, up 47% from the year-ago period, largely thanks to a 46% surge in online advertising sales to nearly $1.2 billion.
Besides the strong ad sales performance, Yahoo saw its fees from premium online offerings, such as broadband content features bundled with high-speed Internet access, jump 55% to $170 million. The company now boasts 11.4 million premium subscribers, up from 7.6 million a year earlier.
"Yahoo has continued its run of exceptional growth," Semel told analysts during the company's earnings conference call last month, according to the Wall Street Journal.
Indeed, even if it doesn't gain a stake in AOL, Yahoo is clearly making its mark in the broadband content business. In its most recent move, the company announced plans with BellSouth last month to deliver co-branded high-speed Internet service to the Bell's nearly 2.7 million FastAccess DSL subscribers at no extra charge, starting late next year. As part of that deal, Yahoo will offer customized Web browsing, personalized broadband home pages, a premium-level Internet radio service, access to a large catalogue of music videos, digital photo features, and news and entertainment content.
The announcement of the BellSouth pact came just a month after Yahoo launched a similar co-branded high-speed Internet service with Verizon, known as Verizon Yahoo! for DSL. The two partners also introduced a new, lower-speed, lower-priced DSL service that largely matches a similar service already offered by SBC and Yahoo. And they plan to launch another co-branded product for subscribers of Verizon's new, fiber-rich FiOS service.
As a result, Yahoo has now secured broadband content integration deals with the three biggest Bells in the U.S., granting it access to 92% of the 16 million-plus DSL subscribers in the nation. In fact, Yahoo has now supplanted Microsoft's MSN service as the main content partner for the three biggest telcos, leaving only Qwest primarily in MSN's hands.
Yahoo has not inked a broadband content integration deal with a major cable operator in the U.S. yet. But it does have an agreement with Rogers, the largest MSO in Canada. That pact, concluded in early 2004, offers a number of high-speed features and applications to Rogers' 1 million or so cable modem subscribers, including customized Web browsing, personalized home pages, enhanced e-mail, virus protection, spam control, enhanced instant messaging, parental and security controls, digital photo tools, online music services, online games and video services.
Rogers officials have expressed satisfaction with the results of their alliance with Yahoo so far. But they weren't available to discuss the results in detail last month.
As evidence of their success, Yahoo executives point to their partners' ability to sign up droves of new broadband subscribers. In particular, SBC has enjoyed some record-breaking DSL customer gains since hooking up with Yahoo.
Yahoo officials also argue that they've helped their broadband partners cut subscriber churn rates. Plus, they contend, their partners' customers use more broadband features and spend more time online.
In Yahoo's boldest move yet on the broadband content front, it's holding preliminary talks with Time Warner for a stake in AOL. Quoting anonymous sources, press reports have characterized the discussions between the two media companies as "informational."
A bid for AOL makes great sense for Yahoo, especially as a defensive strategy. The Internet firm would love access to AOL's huge treasure trove of free and premium content, as well as access to the huge online audience that AOL still commands. Furthermore, Yahoo would dearly love to keep AOL out of the hands of its two biggest Web rivals, Microsoft's MSN service and Google.
But Microsoft and Google, either on their own or in partnership with Comcast, appear to have the upper hand in the negotiations so far. Like Yahoo and Time Warner, Google and Comcast have declined comment on the discussions.
http://www.cabledatacomnews.com/nov05/nov05-6.html
