SBC, Yahoo form alliance for DSL Internet service

Thursday, November 15th 2001, 12:00 am
By: News On 6

SAN ANTONIO (AP) _ SBC Communications Inc. and Yahoo! Inc. unveiled a marketing alliance Wednesday to provide high-speed Internet service and other Web-based products in the 13 states served by SBC.

The service, to be known as SBC Yahoo, is scheduled to launch in mid-2002.

The partnership bodes the eventual demise of the Prodigy brand. Earlier this month SBC paid $465 million for all shares of Prodigy, an Internet dial-up service and Web portal with 3.6 million customers nationwide.

``We believe Yahoo is a stronger brand name,'' said James Kahan, SBC's senior executive vice president for corporate development.

Employees at Prodigy, based in Austin were told of the SBC-Yahoo alliance at a staff meeting earlier in the day, said SBC spokesman Larry Solomon.

SBC's dial-up customers acquired in the Prodigy deal are expected to be switched over to the SBC Yahoo portal by the end of 2002, and then the Prodigy name will be eliminated, he said.

Solomon said the move will lead to job cuts among both current SBC and Prodigy workers, though he said the extent was still yet to be determined.

The venture signals Yahoo's choice of DSL over cable modem as a Internet broadband solution. SBC, with 1.2 million customers, is the nation's largest DSL Internet provider.

SBC Yahoo will offer premium services, among them more Internet content and online video capabilities, the companies said.

SBC and Yahoo officials said they will share revenue from the co-branded service. Yahoo, for example, will receive a portion of Internet subscriber fees paid to SBC, while SBC will get a cut of Yahoo's advertising and e-commerce revenue.