Comcast, Yahoo sign sales, marketing deal

The agreement is part of Comcast's effort to dominate Web video. It hopes to boost online advertising revenue.

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Two Comcast trucks in Salt Lake City last year. Yesterday, the Philadelphia-based company said it had agreed to spend $570 million to buy stakes in sports networks in California and New England.

Comcast Corp., seeking to become a major player in online advertising, said yesterday that it had signed a partnership that would give Yahoo Inc. marketing and sales responsibility for the Philadelphia cable giant's primary Web site, Comcast.net.

The deal is the latest in Comcast's ongoing effort to dominate Web video, as it does cable television.

Comcast has been able to turn Comcast.net into a popular Web site because it is the default page for the company's 12 million high-speed Internet subscribers. Comcast.net is one of the 10 most-visited online sites, counting more than 15 million unique visitors monthly.

But until the Yahoo announcement, Comcast had done little to turn those viewers into moneymaking assets by selling ads.

Amy L. Banse, president of Comcast Interactive Media, said Yahoo's "scale, experienced sales force, advertiser relationships, and industry-leading display advertising capabilities will bring significant new monetization opportunities to Comcast.net."

Comcast expects to raise about $1 billion in revenue from online advertising and search capabilities over five to six years, a source familiar with the deal said. Comcast reported $7.39 billion in revenue in the first quarter of 2007.

Yahoo has been seeking ways to place more ads for other companies as it struggles against Google Inc.'s dominance in that market.

Comcast uses Google for its search functions, but not for advertising, and reportedly has been unhappy with that relationship because it would like a bigger share of revenue from the deal. The arrangement between Comcast and Google expires at the end of the year.

James McQuivey, an analyst with Forrester Research Inc., said some companies had grown wary of Google because of its increasing dominance in Web advertising.

Craig Moffett, an analyst with Sanford C. Bernstein & Co. L.L.C., said Comcast was aiming to become the leading provider of "legitimate copy-protected mainstream video on the Web."

Comcast has built a strong position with its Web site, but Moffett said that the record of large companies' "trying to launch new Web businesses is spotty at best."

Even Google, with its upstart cachet, tried to create its own video site but ended up buying YouTube Inc. instead, he noted.

Also yesterday, Comcast said it had agreed to buy Cablevision Systems Corp.'s stakes in sports networks in California and New England for $570 million in cash, furthering the Philadelphia company's reach into the sports world.

When the deals are completed, Comcast will own 100 percent of FSN New England and 60 percent of FSN Bay Area. The remaining 40 percent still will be owned by an affiliate of News Corp., Cablevision's previous partner.

FSN New England carries Boston Celtics games. FSN Bay Area shows the Oakland A's, San Francisco Giants, Golden State Warriors basketball and San Jose Sharks hockey.


Contact staff writer Miriam Hill at 215-854-5520 or hillmb@phillynews.com.