Blog Post

Yahoo Reups Verizon Portal Deal; Change in Rev Share Terms

There was a time in 2005 and 2000 where Yahoo (NSDQ: YHOO) was signing up various broadband providers to make itself the default portals for the Internet access subscribers: Verizon (NYSE: VZ), SBC (now AT&T) and Bellsouth, among others. Not much was heard on these deals since 2006 (barring that AT&T (NYSE: T) deal restructuring early this year), but now Yahoo has re-upped its deal with Verizon, along the same lines as before: users will be able to select a start page of a cobranded Verizon-Yahoo with Yahoo services, of course. Users can also choose to use services from Microsoft (NSDQ: MSFT) or AOL (NYSE: TWX), but Yahoo will be the first option on the list under the new agreement, reports WSJ. Verizon said Yahoo earned the top position, previously held by Microsoft, based on the revenue it generated and shared with Verizon.

Also, the rev share terms have changed: the old deal paid Verizon based on users it brought to Yahoo, as well as advertising and premium services revenue share on the joint portal. The new deal is based solely on revenue-sharing: Yahoo will give Verizon a cut of the revenue generated from search and display ads and premium services.

As the WSJ story points out, this deal comes as Verizon and Google (NSDQ: GOOG) are in advanced discussions on using the latter’s search service on Verizon’s mobile service. The deal could also possibly extend to Verizon’s broadband portal and Verizon’s FiOS TV service, which of course would complicate matters with Yahoo.