Is AT&T considering a Yahoo acquisition? The now-again world's largest telecom has considered acquiring the Web portal in the past, particularly because the companies have been selling a joint
Internet service in a relationship that goes back six years. However, in recent years, AT&T, through a series of acquisitions and an acquirement by SBC Communications, has reemerged as the telecom
industry's biggest firm, while Yahoo was the tech sector's wounded animal on Wall Street last year, down about 40 percent.
As a result, network provider AT&T wants to renegotiate its
branded ISP partnership with Yahoo, mostly because the balance of power has now shifted in the telecom's favor. On last Friday's news, Yahoo shares fell 5.2 percent (representing about $8 billion in
market value), recovering slightly in heavy trading yesterday.
As Scott Kessler, a Standard & Poor's analyst, says: "[Telecom] companies have millions of broadband subscribers.
Frankly, they need to rely considerably less on Yahoo to acquire customers. Indeed, at a time when rival Google keeps stealing away potential Yahoo partners, AT&T still represents Yahoo's biggest such
alliance, contributing as much as $800 million in revenue annually.
Read the whole story at Financial Times »