Still, fantasy football remains an attractive business for the company. Entertainment subscriptions including fantasy sports may offer Yahoo! greater opportunities for growth than in other fee services where there is greater competition from rivals, Pyykkonen says.
Yahoo!'s success at fantasy football is spurring increased competition from rivals.
Both ESPN and Fox Sports began offering free fantasy games this year. So did the National Football League, which previously provided only a pay service. ESPN got twice as many people to sign up for fantasy football this year as it expected, said Paul Melvin, a spokesman for the network. He declined to disclose the figure. Signups at Fox Sports and the NFL's fantasy games also surpassed expectations, according to spokesmen for those organizations.
"Others have not been forced to go free because of Yahoo!," says Greg Ambrosius, the head of the Fantasy Sports Trade Association. "It's just that big sites like ESPN and Fox who have advertisers who want to reach larger audiences can supplement the free model financially, whereas smaller sites can't do that."
Viacom's CBS SportsLine is bucking the trend. It has charged for fantasy football since 2002 to focus on attracting hardcore fans and advertisers interested in reaching them. The Viacom-owned Web site estimates that it has 3 million fantasy players, most of which play football. SportsLine says it has no interest in offering free games.
For its part, Yahoo! still expects to continue to dominate fantasy sports.
"We have been able to withstand the competitive threat," Katz said.