MSN Out: Yahoo New Verizon Partner

UPDATED Search giant Yahoo announced Monday that it has finalized terms of a multi-year agreement with Verizon to become the default Web portal for the company's new DSL customers. This will also take effect for customers who sign up to Verizon FIOS, a super-fast broadband connection to be rolled out this year. MSN previously provided the default site for Verizon.

Yahoo will provide a branded browser and start page to new Verizon customers and will get a portion of the revenue for every new broadband or FIOS subscriber, much like a similar deal with SBC Communications. In return, Verizon will get a portion of advertising revenue, as well as revenue generated through premium services that users subscribe through Yahoo's Web sites.

"This is a milestone in Yahoo's strategy of partnering with access providers and adding another U.S.-based partner," said Steve Boom, Yahoo's senior vice president of broadband access and bundled services. Boom also said that the company was in discussions with "everyone" but declined specifically to name any other companies.

Verizon will, however, continue to offer MSN as the default homepage for some users. "If a new customer comes to us from a MSN channel, they will be offered only the MSN co-branded portal," a company spokesperson told BetaNews. Users who sign up to Verizon DSL independently of MSN or Yahoo will be provided a choice of portals, with Yahoo being listed first.

For its part, MSN says it continues to enjoy a strong relationship with Verizon. "Choice for consumers is a good thing and MSN Premium will remain a choice for Verizon customers," Brooke Richardson, lead product manager for MSN communication services, told BetaNews.

The deal's effect on MSN could go either way, according to Jupiter Research senior analyst Joe Wilcox. "When MSN committed to exiting the ISP business, it shifted focus to bundles with other access providers," he said. Wilcox said that the "Comcasts and Verizons of the world" are important to the service as distribution points, and thus a switch to Yahoo could be seen as a blow to MSN.

Wilcox noted, however, that MSN has moved away from the Internet service itself as a revenue stream. "MSN increasingly offers more paid services from msn.com, where it is creating more conduits for advertising, paid search and affiliate marketing relationships. The portal's growing importance as a revenue generator diminishes the impact of MSN client bundling deals," Wilcox said.