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ABCNews.com scraps Yahoo deal

The online news site pulls out of its arrangement to provide streaming video and news reports to the Web portal.

ABCNews.com said Thursday that it has pulled out of its arrangement to provide streaming video and news reports to Yahoo.

"ABCNews.com has enjoyed working together with Yahoo for the past several years," said Bernard Gershon, senior vice president of ABCNews.com. However, "due to the heavy demand for ABCNews video from our users, we are currently reassessing ABCNews.com's online video strategy."

The move could be a setback for the Web portal, which relies on third-party content to drive audiences to its network of sites. The decision could also highlight a diminishing interest among major media outlets in giving away content in exchange for traffic, deals once popular with many highly trafficked sites such as Yahoo.

ABCNews, owned by Walt Disney, had soured on the terms of its deal in which it provided content to gain wider exposure on Yahoo, according to sources familiar with the discussions. The sources added that ABCNews is favoring a paid subscription relationship similar to its current deal with RealNetworks' subscription service RealOne. Content providers on RealOne receive a cut of subscription revenue.

"Yahoo has had a tremendous relationship with ABCNews.com for the past several years. However, they have indicated to us that their needs have changed and they are reassessing their online video strategy," Chris McGill, director of business development at Yahoo News & Information, said in a statement. "Both companies have expressed the possibility of working together again in the future."

The ABCNews-Yahoo deal was originally struck in December 2000.

Yahoo has already removed most of its links to ABCNews.com. Indeed, when conducting a search for "ABCNews" on Yahoo's search engine, a message posted at 12:35 p.m. PT Thursday appeared, announcing the change: "ABCNews.com news is longer distributed on Yahoo News. Please remove it from your My Yahoo pages. We apologize for any inconvenience. Thank you."

Nevertheless, Yahoo continues to be one of the Web's largest aggregators of content. The site has agreements with major content producers, including The Associated Press, Reuters, The New York Times and National Public Radio. CNET Networks, publisher of News.com, has a distribution relationship with Yahoo and is a partner on RealOne.