Yahoo! buys broadcast.com

Yahoo! has confirmed widespread rumours and announced that it is to buy broadcast.com for $5.7bn in stock.

Broadcast.com is a video and audio aggregation service. It became well known for its distribution of Bill Clinton's video evidence to the Starr Commission and for underwear company Victoria Secrets' catwalk show.

Yahoo! is paying $130 for each broadcast share - ten per cent over its closing price. The deal will all be paid for with Yahoo! shares.

The deal gives the portal access to a wide selection of multimedia sources as well as an increasing number of companies choosing to use the site to distribute video annual reports.

Noah Yasskin, analyst at Jupiter Communications, said: "Yahoo! is the only big independent portal left, it doesn't have the offline media backers of the other players - this deal gives them access to this side."

But Yasskin added that Internet video and audio still has a long way to go. "We predict that only about 20 per cent of US homes will have broadband access by 2002 - without that it isn't really an issue."