Yahoo! Plans Bundled Services

Yahoo on Wednesday said it would begin to bundle together premium services in a new offering called Yahoo Plus.

The company began experimenting with Yahoo Plus in November, bundling together a variety of its premium services designed to appeal to broadband users. The new bundled packages will be arranged in tiers, executives said, to cater to different needs.

Yahoo did not announce pricing for Yahoo Plus, but executives said the company would offer a few different levels. The basic package will offer email and instant messaging, security, parental controls, and some mix of Yahoo’s own premium services, like auctions and personals.

“Each level will be very competitively priced,” said Geoff Ralston, Yahoo’s senior vice president for network services. “By offering more choice, we think we’ll be reaching the largest number of customers.”

The package will complement Yahoo’s high-speed Internet access deal with SBC, which began in September. CEO Terry Semel said the deal was ” really, really working really well.”

In the past year, Yahoo reported the service has drawn over a million subscribers. Overall, Yahoo boasts 2.1 million paying customers for its growing list of premium services.

Earlier on Wednesday, Yahoo announced a deal with British Telecom to co-market high-speed services in the United Kingdom.

The company said it expects its broadband customer base will grow between 50 and 90 percent in 2003.

The move to offer a premium services package outside of its access partnerships puts Yahoo in competition with AOL and MSN, which have turned to bring-your-own-access schemes after seeing sluggish consumer demand for its new dialup ISP offerings.

“It allows us to deliver a much greater sense of value to the consumer,” Ralston said. “We’re taking a very different tack with this bundling than our competition.”

In addition to Yahoo Plus, the company plans to offer a premium music and video subscription package called Yahoo Platinum. Designed as an alternative to the type of service provided by Real Networks, with news, sports and entertainment content from third-party providers, Yahoo Platinum hopes to capitalize on the fact that 59 percent of Yahoo users already have broadband connections, said Jim Brock, Yahoo’s senior vice president of consumer services.

Under Semel, Yahoo has expanded its revenue base to include areas outside of the hard-hit online advertising sector. Premium services brought in $89.4 million in the fourth quarter, a 120 percent increase from the same period a year ago.