• by Gavin O'Malley  @mp_gavin, March 27, 2006

Facing declining demand for premium service packages without Internet access, Yahoo last week began notifying its Yahoo Plus subscribers that their subscriptions for fee-based content and services will be halted as of April 22. From that point, subscribers can still use their Yahoo Plus ID to access a free version of the service, but one that does not provide future updates for premium Yahoo Plus services.

For $5.95 a month, or $3.95 a month with an annual subscription, Yahoo Plus offered plenty of software and services--for security/antivirus, e-mail, entertainment, and storage--but not Internet access.

When Yahoo Plus launched in late 2003, demand for "bring your own broadband access" bundles was higher, but has since dwindled as prices for broadband--and complimentary services--have fallen. In its place Yahoo has substituted co-branded broadband services with top telecoms like Verizon and AT&T.

"Interest has clearly shifted to co-branded packages, and it's become clear that Plus is not a core part of our growth," said a Yahoo spokesman. "It will allow us to focus completely on our co-branded efforts."

Last summer, Verizon replaced Microsoft's MSN with Yahoo as the default Web portal for its DSL service. In turn, Verizon aligned a Yahoo-branded Web browser and default home page for all its new broadband users.

Yahoo has a similar arrangement with AT&T--formerly named SBC Communications. As with Verizon, Yahoo receives a cut of revenue for every new broadband subscriber, while the providers get a piece of online advertising, search, and premium services dollars through Yahoo.

Like SBC, Verizon is spending billions of dollars extending its fiber-optic network across the United States. It plans to sell video programming through its fiber lines on top of speedier Internet access. Cable broadband typically costs about $45, but the Bells have priced their DSL as low as $14.95.