The Internet giant is teaming with digital subscriber line (DSL) service providers Covad Communications and NorthPoint Communications to target residential and business Internet users. But in relation to its competitors' efforts, the deals come late for Yahoo.
Historically, Yahoo has maintained a policy of noncommitment for its broadband strategy. But while the company has been waiting for the right opportunity, its competitors have aggressively sought deals and investments to groom their services for the increasing number of broadband users in the home and workplace.
During the past year, Yahoo has witnessed its portal competitor Excite merge with cable access provider @Home for $7.2 billion. America Online is in trials to offer DSL service in Bell Atlantic's and SBC Communications' markets, among others. In addition, Microsoft has invested heavily in broadband, including a $5 billion stake in AT&T, the largest cable access provider.
Covad offers DSL services through Internet service providers to small and medium-sized businesses and home users. Covad's services are available across the nation in 51 major metropolitan areas, including Boston, New York, Los Angeles, San Francisco, Houston, and Chicago, with plans to be available in 100 cities by the end of 2000.
Under the agreement, Covad will market a cobranded My Yahoo start page through Covad's distribution channels. The My Yahoo start page is expected to feature the suite of Yahoo's membership services and a Covad broadband sign-up page. The sign-up page is designed to help Covad customers offer ways for their dial-up and other Internet subscribers to learn about DSL connections and buy Covad's broadband services on the spot, the companies said.
Covad and Yahoo's services will allow users to add multimedia broadband content to their news, weather, sports, financial, and entertainment information already found on My Yahoo.
Under terms of Yahoo's new partnership with NorthPoint, both companies will develop, market, and distribute a cobranded My Yahoo Service featuring content and services for broadband customers.
In addition, the companies entered into a distribution agreement designed to boost the delivery of high-speed streaming media programming over the Internet. Yahoo will work with NorthPoint DSL to deliver broadband streaming content, the company said.
NorthPoint DSL uses standard telephone lines to provide access to the Internet at speeds up to 1.5 mbps.
Yahoo's decision to piggyback its service onto an access provider is a familiar arrangement. In the past, the company has signed similarly structured deals with narrowband ISPs, such as MCI WorldCom, to feature its home page as the starting point for subscribers. But the deals have since faded into the background because of lackluster interest.
But some analysts say there could be more need for guidance on a broadband service than on dial-up.
"In some sense it's a repeat of what a number of portals have tried to do in the narrowband space," said Joe Laszlo, an analyst at Jupiter Communications. "But there's more of a chance of succeeding in the broadband space. Consumers are looking for a set of experiences, but they don't know where to find them."