Yahoo Inc. and BellSouth Corp. are joining forces to sell high-speed Internet access, the latest step in a mating dance that has now united the owner of the Web’s most popular destination with the three largest U.S. regional phone companies.
Under the partnership announced Monday, Yahoo and BellSouth will introduce their co-branded service late next year. It will provide BellSouth’s subscribers with customized material from its Web site, which attracted an Internet-leading 99.3 million unique U.S. visitors last month, according to Nielsen/NetRatings, a research firm.
Like the other regional Bells with similar deals, BellSouth wants to tap into Yahoo’s vast content to prevent its Internet service from turning into a faceless utility.
In return, Yahoo will get an unspecified slice of the subscription revenue, as well as a steady stream of traffic as customers initially log on to the service. Yahoo depends on the traffic to sell the advertising that generates most of its profit.
The service, which will provide Internet access through digital subscriber, or DSL, lines, will be available in BellSouth’s nine-state territory: Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee.
Sunnyvale, Calif.-based Yahoo already has similar alliances with SBC Communications Inc. and Verizon Communications Inc., the only regional phone providers larger than Atlanta-based BellSouth.
Combined, SBC, Verizon and BellSouth have about 12.5 million DSL subscribers in 38 states.
The carriers have been trying to lure even more Internet customers to defect from slower dial-up connection services by offering introductory rates ranging from $15 to $20 per month.
The discounting reflects an effort to catch up with the cable industry, which has about 23.5 million subscribers to high-speed, or broadband, Internet access, according to the National Cable and Telecommunications Association.
Prodded by their DSL rivals, cable companies also have been lowering the introductory price for the broadband service, although not quite as dramatically.
Comcast Corp., the nation’s largest cable provider, also appears eager to supplement its service with more compelling content. The company has teamed up with online search engine leader Google Inc. — one of Yahoo’s biggest rivals — to explore a minority investment in Time Warner Inc.’s AOL.
Yahoo also has contacted Time Warner about buying a piece of AOL in an apparent attempt to thwart Google.