Yahoo! Takes Aim at AOL on Broadband
12/08/03 - 12:38 PM EST
George Mannes
The broadband gold rush continues to yield new prospects at Yahoo! (YHOO Quote - Cramer on YHOO - Stock Picks).
The Sunnyvale, Calif., online media giant said on Monday it would offer a premium package of services aimed at Internet users who are migrating to high-speed Internet connections. The push by big communications companies to cash in on that shift has become a key competitive story this year, threatening to alter the balance of power in the growth-strapped telecommunications and cable industries. The new service, dubbed Yahoo! Plus, combines various utilities, such as parental controls, antivirus software and various email accounts, with entertainment content related to video, Internet radio and online gaming. Yahoo! says the service, priced at $5.95 a month with a 90-day free trial, will launch later this month. The offering appears to be a cut-rate version of America Online's Bring Your Own Access edition of AOL for Broadband, a $14.95-a-month service that provides access to Time Warner's (TWX Quote - Cramer on TWX - Stock Picks) AOL. That service is also targeted at consumers migrating from traditional dial-up Internet service to high-speed access provided by a cable TV system operator via cable modem, or by a telco via digital subscriber lines. The latest offering is the latest example of Yahoo!'s effort under CEO Terry Semel to diversify beyond the Internet advertising business that originally brought it to prominence and profitability. Yahoo! Plus will also give the company another way to play the broadband game that it already has a stake in thanks to its DSL venture with giant telco SBC (SBC Quote - Cramer on SBC - Stock Picks). Meanwhile, AOL continues to face a rising tide of competitors offering products that seek to undercut the New York company's products on price. " "We think ... Yahoo!'s announcements will help build consumer awareness of the premium broadband category and -- by comparison -- will highlight AOL's unmatched strengths as the safest, easiest and most compelling offering in that space," an AOL spokesman said.
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