Verizon Communications, the US' largest telecommunications company, said on Monday that it plans to work with Yahoo, the Internet search engine, to introduce a portal for its high-speed Internet service.
The venture comes as competition between telephone and cable companies for broadband customers continues to heat up. Yahoo is also looking for ways to attract visitors to its Web sites and reduce its reliance on advertising revenue.
In the multiyear deal, Verizon's 3.3 million broadband customers will be able to use the co-branded portal at no additional charge. Yahoo will receive an undisclosed share of Verizon's broadband subscription fees, and Verizon will get a share of the advertising revenue generated by the portal.
The Yahoo venture comes on top of a similar arrangement Verizon has with Microsoft's MSN.
When the Yahoo portal is introduced this summer, Verizon customers will be able to choose a Verizon, Yahoo or MSN portal as their preferred home page.
The arrangement is a less ambitious version of the venture Yahoo has had with SBC Communications since September 2002. In that deal, SBC invested US$300 million in Yahoo.
SBC and Yahoo are also expanding their partnership. Yahoo is now designing portals for SBC's IP television service and mobile-phone service. This will let customers use one ID and password on a variety of electronic devices.
Verizon may ultimately do the same thing. The company is installing fiber-optic networks that reach homes in nine states. The service, called Fios, includes high-speed Internet connections and phone service. Verizon also intends to provide television on its network.
In the meantime, Yahoo hopes to increase revenue from its premium services by making a more direct connection to millions of Verizon customers.