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Yahoo! Gains Another Revenue Source

Yahoo! broadened its revenue base and gave its shoppers access to more pre-purchase reassurance by signing a deal with Consumers Union, publisher of Consumer Reports magazine and ConsumerReports.org.

Financial specifics were not disclosed, but Yahoo! said that under the terms of the agreement, it will receive an undisclosed share of revenue from sales of pay-per-view content on its site.

Yahoo! Inc. said that it has integrated both free buying guides and premium pay-per-view product ratings from Consumer Reports into its e-commerce channel, Yahoo! Shopping.

The portal also has integrated free Consumer Reports auto buying guides into Yahoo! Autos, marking the first time this content has been made available outside ConsumerReports.org.

The portal has been exploring a variety of ways to broaden its revenue base, which had been largely advertising driven, and today's move would seem to further those goals. It follows, for instance, on the recent launch of an enhanced version of the Yahoo! Messenger service that allows users to make reduced-rate international telephone calls from their PCs.

Yahoo! had warned in March that ad sales were slowing. However, the stock was actually upgraded to neutral today by research firm and investment bank SG Cowen Securities Corp., which cited better-than-expected online advertising sales for the second quarter. Yahoo! was trading up 94 cents to $20.40 in the early going today, well up from its 52-week low of $11.37 last March.

Today's deal means that shoppers at the portal get to see free guides that contain general summaries of product categories, buying advice and information, including product trends.

Consumers also have the option to buy pay-per-view product reports for $2.95 per report, which includes access to the report for 30 days on Yahoo! Shopping. Each pay-per-view report provides in-depth buying advice, performance ratings and information about key features and brand reliability on all the rated products in a category, similar to the information in Consumer Reports magazine.

"Our research shows that consumers demand trusted information and resources to help them make well-informed buying decisions,'' said Rob Solomon, vice president and general manager of Yahoo! Shopping. "Consumer Reports has established itself as one of the most popular and trusted fee-based sites on the Web, and we are happy to offer their content to our large audience of shoppers."

"This business relationship with Yahoo! enables Consumer Reports to reach one of the largest purchasing audiences on the Web," said John Sateja, vice president of new media at Consumers Union.

Consumer Reports provides consumers with an independent, impartial source of product and service ratings and recommendations, based on its lab testing and survey research. ConsumerReports.org claims to be the largest paid magazine subscription site on the Web, with more than 560,000 paid subscribers (as of May 2001).