Yahoo And BT Team On Broadband - InformationWeek

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Yahoo And BT Team On Broadband

Yahoo will bundle its content and services into BT's DSL and cable products in Britain

NEW YORK (AP) -- Yahoo! Inc. and British telecommunications company BT Group PLC said Monday they would team up to sell Internet access in Britain.

The BT deal will bundle Yahoo's content and services, such as Yahoo Messenger and E-mail, into BT's DSL and dial-up products.

The alliance mirrors Sunnyvale, Calif.-based Yahoo's partnership with SBC Communications Inc., which is expected to drive considerable, high-margin revenue to Yahoo, and had sparked investor hopes of other similar alliances.

"So far Yahoo had a very strong relationship with SBC, and we were looking for them to duplicate that relationship with another carrier," said Youssef Squali, an analyst at First Albany.

BT's access business is about half the size of SBC's, he estimated, suggesting it could generate in 2004 about half the revenue Yahoo will gain from SBC this year.

Squali thinks Yahoo revenue related to SBC will total about $60 million to $70 million in 2003.

SoundView's Jordan Rohan, who Monday upgraded his rating on Yahoo stock to "outperform" from "neutral" and set a $35 price target, said if the BT business is half the size, Yahoo revenue from the new alliance "could easily be $15 to $20 million in 2004."

The BT relationship is particularly good for Yahoo because its content and services will be bundled into both the carrier's DSL and dial-up products and provided to new and existing customers, Squali said.

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