The company puchased Encompass Inc., a maker of custom-designed software that enables new users to quickly sign up for Internet access. Yahoo! will pay $130 million for the company.

Encompass' software, which is shipped by PC or hardware manufacturers, automates the Internet provider registration process and also sets up a personalized Yahoo! start page. During the registration process, Encompass collects detailed demographic information which is passed on to its partners.

A number of PC makers and ISPs are Encompass partners, including Acer, CTX, Dell Computer Corp., Diamond Multimedia, Hewlett-Packard, Micron, Toshiba, Sony, AT&T WorldNet, EarthLink and GTE.

Yahoo! President and Chief Executive Officer Jeff Mallett said the deal will expand the business services offered to strategic partners and is consistent with its desire to promote Yahoo! through a variety of platforms.

"Encompass integrates several traditionally disparate elements and enables us to give PC providers one comprehensive solution that results in easier access to the best content and services available on the Web and a better consumer Internet experience, which is the foundation of Yahoo!'s business philosophy," he said.

John Wilcutts, Encompass' president and chief executive officer, said the deal builds on a distribution relationship the two companies have had for more than a year.

"This merger deepends our combined commitment to deliver to consumers the easiest and most compelling experience on the Web, while providing added value to hardware and device manufacturers, ISPs, advertisers and merchants," he said.

Yahoo! said the deal will complement its Fusion Marketing effort that designs integrated marketing programs for merchants and advertisers around the world.

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