Encompass provides software that allows users to get on the Internet. Yahoo has had distribution agreements with Encompass for more than a year in which Encompass has paired its Internet access software with Yahoo's personalized My Yahoo site.
Yahoo has been broadening its services to lure new users to its Web site. The acquisition will allow Yahoo to provide Internet software to computer makers, Internet service providers, advertisers, and merchants, the company said.
The acquisition is being accounted for as a pooling of interests, Yahoo said.
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