Yahoo Gets a Boost From Ma Bell

A few months back, when everyone was speculating about the sale of Yahoo, we thought that perhaps AT&T would buy them. After all, Yahoo powered the AT&T portal, and for a long time got paid for it — at least until Ma Bell wised up and asked for a piece of the advertising revenue.

Well obviously that acquisition never materialized, but Ma Bell and Yahoo have just inked an agreement that is good news indeed for the Sunnyvale, Calif.-based search and online media company. As part of the deal, AT&T will offer Yahoo’s search engine as the default network to its broadband computer, Internet TV and mobile phone users.

Under the partnership, announced in January 2008, Yahoo!’s oneSearch will provide Web services relating to topics including news, finance, weather and access to its Flickr photos. The deal replaces a 2001 agreement where Yahoo! split revenue with AT&T when its customers signed up for broadband computer Internet services.

I’m sure we will soon find out the financial implications of this new deal. My suspicion is that it isn’t going to be fiscally meaningful for either party. Yahoo, regardless of how great some of its web services may be, is a laggard in what matters most: monetization. The deal is, however, a morale booster for the beleaguered firm — and could provide some lift to Yahoo’s traffic as well.

* AT&T, Yahoo alliance on the rocks
* Yahoo, saved by the Bell.