Research firm Jupiter Communications reported earlier that some 40 percent of European households will be able to access the Internet in 2002 compared with about 13 percent currently.
"Yahoo wants to provide Internet users with appropriate and easy-to-use tools, which facilitate optimal Web use," Yahoo Germany's managing director Peter Wartenberger said in a statement. "By working together with Mannesmann Arcor we are expanding our service with a fast, easy-to-use 'Internet by Call' access."
Beginning in May, the new Yahoo-Mannesmann service will be available via Yahoo's Germany homepage. Once the access is installed, one click on the Yahoo Online Icon will up the connection to the Internet.
Financial terms of the deal were not disclosed.
The setting will prompt the PC to automatically dial the Yahoo Online number at Mannesmann and then connect users directly to Yahoo Germany's starting page.
The user only pays for time he stays on the Internet and is charged Mannesmann's "Internet by Call" tariff. There is no monthly basic fee for the dial-up service.
"We want to simplify Web access and make it more attractive," said Mannesmann chief executive Harald Stober. "Mannesmann Arcor offers the user efficient and cost-effective Internet access to the world-wide data network."
Shares of Yahoo surged 3.24 percent to 179.25 in early trading. The stock has hit a high of 222.5 and a low of 20.31 during the past 52 weeks.
Reuters contributed to this report.