SBC, Yahoo Will Co-Brand DSL ServiceSBC, Yahoo Will Co-Brand DSL Service

SBC Communications Inc. and Yahoo Inc. will team up to offer co-branded digital subscriber line and dial-up Internet access to customers in SBC's 13-state service area. The service, which will be called SBC Yahoo, will begin in mid-2002.

SBC is the nation's second-largest local phone company and the No. 1 DSL provider. The company already has more than 3.6 million Internet customers across the country, including many former subscribers to the Prodigy Network. Earlier this month, SBC completed its purchase of Prodigy, paying $465 million for all outstanding shares.

Under the terms of the deal, Yahoo will collect monthly per-subscriber payments from SBC and will be able to sell bundled premium services to subscribers. In return, SBC will receive a cut of Yahoo's advertising and E-commerce revenues.

Sands Brothers analyst David Zale is not impressed. He says Yahoo really needs an alternate revenue stream, but this isn't it. "DSL is not doing that well generally, and it's falling behind cable. Without some hard numbers, this is just not going to mean anything."