Yahoo announced a deal on Tuesday to bundle its Web services with high-speed Internet service from Rogers Cable, a major Canadian cable company.
Subscribers to Rogers' cable broadband will get access to a collection of Yahoo services, including a customized Web browser, enhanced e-mail and instant messaging, security and spam control, pop-up advertisement blocking and digital storage. Rogers has 800,000 broadband customers throughout Ontario, New Brunswick and Newfoundland.
However, the companies sidestepped questions about timing, saying the product will likely launch in 2004.
"We are both excited to get into market, but we are not announcing when that will be," Edward Rogers, CEO of Rogers Cable, a subsidiary of Rogers Communications, said during a conference call.
Toronto-based Rogers is the latest high-speed Internet access provider to package Yahoo services in its plans. Yahoo already has agreements with SBC Communications in the United States and with BT in the United Kingdom.
While the SBC deal has helped Yahoo boost its nonadvertising revenue, the Web portal has yet to strike a similar pact with another U.S. broadband provider. Cable companies in the United States, which have the majority of broadband subscribers, have avoided partnerships with Web portals such as Yahoo, MSN and America Online. The two largest U.S. cable companies, Comcast and Time Warner Cable, have opted to beef up their home pages rather than partner with a third party for content.
Yahoo receives a cut from every SBC digital subscriber line (DSL) bill. This revenue makes a significant contribution to Yahoo's "fees" revenue, which encompasses all its paid services, including premium e-mail, personals and fantasy sports. Last quarter, Yahoo reported $85.2 million in revenue from its fees business, largely fueled by SBC's contribution. Last quarter, SBC added 378,000 new DSL subscribers for a total of 3.5 million. Most of those customers now count as Yahoo subscribers as well.
Financial terms of the Rogers deal were not disclosed. The companies said the agreement was a "multiyear" deal.
"This is an initial announcement," Yahoo CEO Terry Semel said during the conference call. "There will be revenue sharing in both directions."
The haziness as to the details of the deal may spring in large part from competitive caution, according to analysts. In June 2003, Bell Canada, which offers a rival DSL service in Ontario, struck a similar deal with Yahoo competitor Microsoft to bundle MSN's Web software with its service.
Bell Canada and MSN have also remained mum on their product, which may have contributed to Rogers and Yahoo's own avoidance of detail.
"Rogers is essentially waiting to see what Bell (Canada) and MSN will do," said Brahm Eiley, a research analyst at Toronto-based Convergence Consulting Group. CNet News