BT and Yahoo! team up to offer broadband service

Yahoo UK has teamed up with BT Broadband to offer a high-speed internet service.

The new service, dubbed Yahoo UK Plus, will include multiple email accounts, instant messaging, digital photo storage, firewall security and antivirus software. The companies did not say when the service would be available or how much it would cost.

High-speed access and other premium services are a key part of Yahoo's evolving strategy, aimed at shoring up the web portal's bottom line. In the third quarter, the company's fees and listing business rose 120 per cent to $89.4m. About 70 per cent of that business comes from premium services including personals, email forwarding, email storage and internet access.

Today's deal with BT is Yahoo's second with a major telecommunications company. Last year, Yahoo and SBC Communications launched a co-branded DSL service in the US that features Yahoo's front-end web content and services bundled into SBC's internet access. Yahoo gets a cut from subscription revenue and will split its advertising revenue with the telco.

The deal was touted by Yahoo as a way to diversify its revenue in the face of an anemic online advertising market. Executives have long promised more deals with broadband access companies, namely telecoms and cable providers. But to date, SBC remains the only US provider under its belt.

From the description, Yahoo's BT offer mirrors a test product called "Yahoo Plus." Unveiled as a preview in November, Yahoo Plus is a combination of the company's various premium services, similar to the one offered with the BT product. At the time, Yahoo Plus was priced at $7.95 a month, although company executives said the price was liable to change.

In November, BT signed a similar deal with Microsoft, as part of the company's launch of the MSN 8 online service.

CNET News.com's Jim Hu contribited to this report.