Both Yahoo and Verizon are expected to benefit from the two companies' new high-speed Internet co-marketing agreement.
Verizon Communications, New York, and Yahoo said earlier this week they are offering Verizon Yahoo for DSL, an integrated high-speed service to Verizon Online DSL subscribers in 28 states and the District of Columbia.
“The benefits to Yahoo are that they are going to probably grow their user base and their usage, and collect some pretty high-margin revenues,” said Scott Kessler, Internet equities analyst with investment research firm Standard & Poor’s, New York.
Sunnyvale, CA-based Yahoo's profit margins should be fairly high, Kessler said, since the deal does not require Yahoo to commit a lot of resources. Instead, it is primarily repurposing content.
Verizon Yahoo for DSL is now the default choice for all new Verizon DSL customers. Current DSL subscribers can select Verizon Yahoo services, including nine e-mail accounts, Yahoo Messenger, anti-virus protection and Verizon Yahoo Music Unlimited.
The Yahoo services include premium features and content that would cost up to $200 a year if purchase separately, according to Verizon.
Yahoo already has a similar agreement with Verizon rival SBC Communications Inc., San Antonio, Texas, which added Yahoo's Music Unlimited offering immediately after the Verizon deal was announced.
Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters