SBC, Yahoo! Marriage Gets Serious

Deciding they like the sound of their names combined, and the attendant
revenues such a bond would create, SBC Communications and Yahoo! executives strengthened ties to each other with a contract expansion that runs into business broadband services.

According to SBC officials, small business customers make up 25 percent of its total Internet subscribers. With almost 60 million lines in service throughout its 13-state network, the telephone company would obviously love to increase that percentage, given the higher prices charged for business-grade services.

Similar to their previous arrangement, Yahoo! gets a percentage of every SBC customer brought in after the two companies offer co-branded service. The Bell, on the other hand, gets a percentage of advertising, e-commerce and premium services revenues. Both sides won’t release figures on the deal.

Shawn Dainas, an SBC spokesperson, said the new contract won’t be finalized until later this year, and that pricing has yet to be determined. He did say the previous deal made it easy for SBC to deepen its involvement with the portal company.

“Things have been moving along very smoothly, since we signed the earlier agreement we’ve been focusing on working with our integration teams to get the consumer project going,” he said. “It’s been going very well and made it easy to decide to expand our relationship.”

In November, 2000, both companies penned a co-branding deal that will put Yahoo!’s name on SBC’s residential dial up and digital subscriber line (DSL) service in the coming months.

Tuesday’s agreement is an expansion of that original pact, one that puts Yahoo!’s name on SBC’s high-speed business services, which include virtual private networking (VPN) and videoconferencing.

Edward Whitacre, Jr., SBC chairman and chief executive officer, says
Tuesday’s announcement is a “natural progression” in its partnership with Yahoo! and will help bring brand awareness to the business community.

“Small businesses are a critical customer segment for SBC and by expanding our alliance with Yahoo!, we will enhance our ability to help small businesses increase their capabilities, create more opportunities and extend their resource,” he said.

The Bell’s DSL sales, which have been flagging the past year when competing with cable modem service, are expected to pick up once the household name of the world’s largest Internet portal is attached.

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