Search engine company Yahoo has formed a partnership with MCI to provide an online service dubbed Yahoo! Online.
Available in March, the service will be powered by the MCI network and ISP connections, with Yahoo?s content. It will target users of sub-$1,000 personal computers and compete with online services from America Online and Microsoft MSN.
Financial details of the agreement have not been disclosed and there are no indications yet of how much the service will cost.
?The service will include current Yahoo! offerings such as news, sport, entertainment and finance along with our personalised services,? said director of corporate communications Diane Hunt. "Plus we are working with our content providers with the aim of giving new premium content and services, which will not be disclosed until March.?
Hunt said that Yahoo! Online is aimed at ?a couple of audiences - people who already use Yahoo! from work, school and public access points and what we call ?near surfers? - those who have a PC and modem who phone us up and ask how to get connected to the Internet.?
Analysts are confident that Yahoo!, the most popular Internet search engine with 26 million US visitors to its site per month, will attract new users and boost profits through its brand name alone.
IDC predicts that the number of Internet users worldwide will double this year alone from 50 million to 100 million, boosting subscription and advertising revenue for all the online services.
?There is a huge room for us to be successful, along with some of the other players in the market,? said David Trachtenberg, MCI?s director of brand marketing.
Other analysts, however, believe it will be a long time before Yahoo! Online competes with AOL, which now has more than 10 million subscribers. MCI currently has 250,000 users.
Hunt believes ?there is room for more than one ISP as the maket continues to grow,? and claims that Yahoo! is ?grateful to AOL for building the industry over the past 13 years.?
As for extending the service to Europe, Hunt said ?we will watch, measure and look at the adoption rate, but Yahoo! never says never.?
On Wednesday Yahoo! announced profits of $2.5 million, or five cents per share, on sales of $8.9 million. The company?s stock was the highest performing technology issue in 1997, more than tripling its price from $20 per share a year ago to $67 prior to the earnings announcement.
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