AT&T, Yahoo ink advertising deal

AT&T and web services giant Yahoo announced a multi-year deal that promises to create new ad-based revenue opportunities via mobile handsets and PCs. The companies said the agreement calls for revenue sharing, but did not disclose detailed financial terms. Per terms of the deal, Yahoo will provide multi-platform search and display advertising, including access to co-branded versions of Yahoo's mobile Web properties. AT&T's Yellowpages.com will also supplant Yahoo Local Search as the primary local search experience for AT&T wireless and broadband customers.

In effect, Yahoo will exchange annual access fees derived from AT&T for advertising revenue, following on the heels of similar deals with Vodafone and Rogers Wireless. In a conference call Wednesday--during which time Yahoo confirmed reports it will layoff 1,000 employees--Yahoo CFO Blake Jorgenson said agreements like the AT&T deal will cut $150 million to $200 million a year from Yahoo's revenue, although the restructured contract calls for AT&T to make a onetime payment this year of $300 million to $400 million.

For more on the AT&T/Yahoo deal:
- read this release

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