Yahoo! Inc. is making its broadband bet on digital subscriber line over cable
with an announcement that it will enter a strategic alliance with SBC
Communications Inc. to exclusively create and sell broadband service via DSL in
the Baby Bell's 13-state region.
The deal calls for the two companies to field a custom, co-branded DSL
service in SBC's territory beginning in mid-2002.
The service includes a co-branded browser; a package of premium services
including Web-cam functions; parental control; multiplayer games; and additional
centralized storage space for subscribers' personal content.
SBC will bill customers and collect the revenue, sharing an undisclosed
percentage with Yahoo! Yahoo!, in turn, will share a portion of its marketing
and advertising revenue with SBC.
In SBC's region, Yahoo! will exclusively spell broadband 'DSL.' Choosing DSL
over cable modem is based on the opportunity to combine instant messaging with
SBC's voice products, as well as SBC's narrowband customer base, which is ripe
for the upselling, according to Jim Brock, Yahoo!'s vice president of major
'That makes this partnership tremendously powerful,' Brock said. 'We also get
really excited about taking our small business products and applications,
together with those of SBC, and providing a small-business set of services that
only DSL can reach on the broadband platform, unlike cable. So for all of those
reasons, that's why this is our exclusive focus.'
For SBC, the deal not only gives it pumped-up broadband content and services,
but it also gives the Baby Bell a stronger DSL hook, according to CEO Ed
'As part of this agreement, we will jointly develop and deliver those
next-generation broadband-powered services,' Whitacre said.
'Together, we will make the promise of online games, video-on-demand,
personal video conferencing and other broadband services a reality to our
customers,' he added. 'The winners in the broadband marketplace will be the ones
that deliver superior broadband-powered content and services to their