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RealTime IT News

Do You (Bring Your Own) Yahoo?

By Alice Hill

As more and more dial-up ISP customers flee to an always-on broadband connection, the move is not always as welcoming as it sounds.

After all, once they get to the high-speed online world, former dial-up users often find themselves missing many extras that dial-up ISPs such as AOL offered. For example, multiple e-mail accounts, parental filtering, spam blocking, chat and IM integration and original content are not always built into the monthly high-speed connection fee like they are with dial-ups.

Hoping to snap up a slice of those disenfranchised dialers as well as those who use Yahoo's offerings for free, Yahoo is pitching a low-priced suite of premium tools and services such as a personal firewall, anti-virus support, and pop-up and spam protection.

Called Yahoo! Plus, the new $5.95 "bring your own access" (BYOA) is a pitch to provide scaled-down but necessary extras for less than competitors, whose content-and-services BYOA versions average between $9.95 and $14 a month.

"With the addition of Yahoo! Plus, no other company can match the breadth of tools and services -- or the value -- that Yahoo! is able to deliver to our hundreds of millions of users," said Jim Brock, senior vice president of Communications and Consumer Services for Yahoo.

The monthly fee and free 90 day trial period for Yahoo! Plus also offers enhanced email support for up to 10 family accounts, parental filtering on e-mail and instant messaging, and family-themed tools such as online photo sharing and storage.

For entertainment, Yahoo is rolling out premium news and entertainment video content, access to Yahoo's LAUNCHcast Plus Internet Radio services, as well as an online gaming section that includes enrollment in Yahoo's All Star Games tournament play.

But will it work?

Yahoo's announcement comes on the heels of MSN's recent plan to roll out a suite of broadband tools called MSN Premium and MSN Links at the upcoming Consumer Electronics Show (CES) in January.

And with users continuing to leave dial-up -- witness ISP leader AOL's two million defections from dial-up in the past year alone, online content providers are looking for ways to follow those users with new add-on services.

Although AOL has reported conversion success with BYOA subscribers who switch over to premium services, the jury is still out on whether Web users will ever pay for services they can find in some form for free online.

A June 2003 study from Jupiter Research had 75 percent of all respondents saying they would not pay for online services at all. (Jupiter Research and this publication are owned by the same parent company.)

With Yahoo's ad-based revenue showing two strong back-to-back quarters, Yahoo! CEO Terry Semel has made premium services a priority. During the third quarter alone, sales in Yahoo's fees business, which includes premium services and its co-branded broadband deal with SBC Communications, rose 38 percent from the prior quarter to $79.4 million.

The company also added 700,000 paying customers during the period, which brings its total in the SBC offering to about 4.2 million. Yahoo! Plus was originally rolled out last year as an add-on to its co-branded DSL partnership with SBC Communications.

Moving now to a BYOA arrangement and at nearly half the usual price of $9.95 a month, Yahoo is hoping that a new type of user will find the package too great a deal to pass up.