Under their multi-year agreement, Boeing shared in pay-per-click fees generated by search results that appeared on a separate Web page co-sponsored by Yahoo.
After spending six years and an estimated $1 billion to develop Connexion, Boeing Chairman and CEO Jim McNerney said in a prepared statement that the market for in-flight Web access had not materialized as expected. The company said it would take a pre-tax charge of up to $320 million, or 26 cents a share, in the second half of 2006 for costs related to shutting down the Connexion service.
A Boeing spokesman could not confirm whether Yahoo would be paid an early termination fee as a result of Connexion being shut down. Boeing also had separate agreements with CNBC, MSNBC, BBC World and Euro News to provide live satellite TV programming on its Internet service.
Boeing charged a flat rate of $26.95 for Connexion per flight, or from about $10 to $18 for one to three hours of Web access. Boeing had announced on June 26 that it was reviewing the Connexion business.