In its bid to lessen its dependence on online advertising, portal giant Yahoo! has forged a deal with SBC Communications, America’s leading provider of digital subscriber line (DSL) web services with access to 23 million homes in thirteen states.
The duo will offer a co-branded DSL access package via SBC phone lines. Billing services will be supplied by SBC, while Yahoo! will provide content that subscribers can download.
Under the agreement, Yahoo! will receive a share of monthly subscription fees, which chairman/chief executive Terry Semel said would be a “new revenue stream”. In return, SBC gains a share of its partner’s ad and marketing revenues.
The deal allows the portal company, which still relies on ad and marketing sales for 80% of its revenue, to generate cash from its content and own the means by which its services are distributed.
News source: Financial Times