Industry News

April 7, 1999

Yahoo and Broadcast.com Merge in a $5.6 Billion Deal

As of April 1, 1999, Yahoo and Broadcast.com have merged in a $5.6 billion deal. Being the Internet’s most dominant portal, Yahoo offers Broadcast.com the audience it needs to turn around its current losses. In turn, Broadcast.com offers Yahoo the streaming media that it needs to compete with America Online and RealNetworks. This merger could spell the beginning of a broadband Internet.

Broadcast.com is a company that specializes in broadcasting different events, such as sports or presidential depositions, over the Internet. The very fact that the company is able to sell its content is attractive to Yahoo, who had formerly only been able to sell advertisements on its content. Now, Yahoo will be able to sell advertisements on top of even more content.

The merger is just one step in becoming THE personal Internet portal. Yahoo has acquired GeoCities, a home page hoster with millions of pages. There are plans in the works for Yahoo to branch out onto multiple platforms, using Online Anywhere’s technology. With all of these recent moves, Yahoo is poised to create and market a massive amount of content.

The only competition that Yahoo currently has is from America Online and RealNetworks. America Online’s major network provider, MCI WorldCom, has partnered with RealNetworks. A way for AOL to really start using its newly-offered high-speed digital subscriber line connections is to directly integrate RealNetworks’ RealPlayer media player into its interface. This integration would provide AOL subscribers with an easy way to obtain broadband content over the Internet, which may mean trouble for Yahoo’s plans.

If all goes well for Yahoo with its new acquisitions and future plans, we could be faced with a personal-Internet version of Microsoft. While this may be good for Yahoo stockholders, it may spell doom for other Internet portals. If you’re a current Yahoo user and are happy with it, fine. But, if you prefer some other portal, then you may be faced with no alternative in the future.

by Dimitrios Aivaliotis

Sources:

http://www.redherring.com/insider/1999/0402/news-yhoobcst.html

http://www.redherring.com/ (as of 4/7/99)