• by Gavin O'Malley  @mp_gavin, January 17, 2005

Yahoo! and Verizon Communications have entered into a multi-year agreement whereby the Web portal will be packaged into Verizon's broadband Internet services, company officials said Monday. Beginning this summer, Yahoo! will replace Microsoft's MSN as Verizon's default Web portal.

Verizon will align a Yahoo!-branded Web browser and default home page for all its new broadband users. The deal applies both to Verizon's DSL service and its upcoming fiber-to-the-home service Fios. "This partnership goes beyond distribution," said a Yahoo! spokeswoman, adding that it involved "a more integrated and usable experience for users."

Yahoo! has a similar arrangement with SBC Communications, the second-largest U.S. local telephone carrier. 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!

"We think the agreement is a good thing for us," an SBC spokesman said. "The more comfortable users are with Yahoo!, the more likely they'll be to keep SBC in mind the next time they're shopping for a provider."

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 $26.95.

MSN and Verizon struck an exclusive agreement in June 2002. Although no longer exclusive, the partnership still exists.

"MSN continues to enjoy a strong relationship with Verizon," said Brooke Richardson, lead product manager for MSN communication services. "Choice for consumers is a good thing, and MSN Premium will remain a choice for Verizon customers."