Telecom signs with Yahoo! to replace MSN deal

Saw this on Forbes and I have to say I’m not really sure how I stand on this. Yahoo! does have a really good brand, but Telecom?

New Zealand Telecom announced Wednesday it has formed a joint venture with Yahoo Inc. and Australia’s Seven Network to beef up content on its Internet portal Xtra.

Telecom, New Zealand’s biggest listed company, will have a 49 percent stake in the joint venture, with Yahoo and Seven holding the remaining 51 percent.

No financial details were disclosed, but brokers say the deal had the potential to boost Telecom’s online earnings, given Yahoo’s global scale and huge consumer following.

“The Yahoo Xtra joint venture will provide New Zealanders with access to the world’s best online services in a localized way,” Telecom Chief Executive Theresa Gattung said in a statement.

The joint venture will replace Telecom’s existing XtraMSN site, an alliance with Microsoft Corp. (nasdaq: MSFT – news – people ), which had been due to expire at the end of this year.

^{New Zealand Telecom, Yahoo Sign Web Deal – Associated Press via Forbes.com}

I guess Telecom really did need a big backer to keep the Xtra portal alive, but how is this going to be that useful to New Zealanders that have already gotten used to the XtraMSN portal over the past few years? Now we get a complete new redesign and a complete new service behind it.

Okay, a little admission from me though. ;-)

I don’t actually use the XtraMSN site at all. In fact, I don’t use MSN in general at all anymore. So this really doesn’t affect me. However, I do use some Yahoo! services. So this is going to cause a slight issue for me in that regard. I never liked the Yahoo!7 site that has been the Au/NZ portal for the past couple of years, so I always took myself off to yahoo.com properties when I wanted to actually use it.

So how does this new branding fit in with things? Especially given that the 7 network has absolutely no brand awareness in New Zealand. We might see the logo at the end of an Australian show or a sporting event, but for the most part, its non-existent here. Adding their branding to the Telecom site will be interesting to see. I also wonder about whether this means that AAPN in Australia will also be setting up more deals with the network. I know that the telco “3″ are streaming sporting events live across their 3G cellular network in Australia. Especially the Ashes tour. I have a vague recollection that Telecom NZ owned a piece of 3, but I can’t find anything that will confirm that now. It was years ago.

However, all that is happening in Australia. Could this be considered the first step in another large Television/Media company moving into the NZ market? CanWest tried it and are surviving, but is there room for another? Not to mention things such as licensing issues and so on. Would this require a deal with Sky Television for them to even get on air here, or would they try to get onto the basic UHF bands?

Not that it matters now though. :-) This is just my mind wandering a little. What does matter is how interesting the new YahooXtra portal will be. More pointedly, why are Telecom so insistent on using a portal by someone else? With the market share they have in NZ, why not just build their own portal. Licensing deals with Reuters and AP aren’t that hard to come by. I doubt they’d have any trouble renewing their arrangements with TRN here in NZ, not to mention the Herald and Fairfax.

Or will the fact that 7 own 51% of the new portal mean that it will be 7′s problem to manage and maintain?

Guess we’ll find out soon enough. Will definitely keep my eye on it. The current XtraMSN deal dies at the end of this year, so who knows when the big new changes will occur. Pretty early in January I’m guessing. While everyone is still away on holiday.