Yahoo! To Merge With Seven in JV

The Seven Network and Yahoo! have announced a deal to combine their online, mobile and IPTV businesses in Australia and New Zealand.

Under the terms of the agreement, Seven and Yahoo! will form a new 50-50 holding company that will own Yahoo! Australia & NZ.

Seven and Yahoo! will each hold three of the six board seats in the entity. The two companies will combining their online teams and are expected to launch a new name and distinct online presence in late January, coinciding with Seven’s coverage of the Australian Open and the Olympic Winter Games in Torino, as well as the opening weeks of the 2006 television season.

The vision for the combined teams is to create the best entertainment, information and communications experience for Australian internet and mobile users, the company said in a statement.

New consumer offerings will ultimately be available across online, mobile and IPTV in areas such as news, sports, entertainment, TV, games, music, and travel. Seven will also contribute AUD$10 million to match the existing development capital in the business, offline promotion through the Seven Network and Pacific Magazines, as well as Seven’s 33 percent stake in mobile solutions provider m.Net Corporation Ltd, which is subject to obtaining required consents.

The deal will allow the joint venture to offer advertisers combined offline and online sponsorships across Yahoo! Australia & NZ, the Seven Network and Pacific Magazines.

Correspondingly, by partnering with a leader in local digital content, Yahoo! will be better positioned to exploit opportunities for growth in Australia. Seven is the largest television company in Australia reaching 98 per cent of Australians through its owned and operated stations and affiliate agreements. Seven’s publishing company, Pacific Magazines, is the second largest magazine company in Australia, with more than 6.6 million readers each month across its 15 publications.

Chairman and chief executive officer of Yahoo! Inc, Terry Semel, said: “Yahoo! and Seven have very complementary businesses and brands, and we see this as a tremendous opportunity to build a leadership position in Australia. This is the best combination to benefit from increased broadband penetration, rich media consumption, and the growing cross-media advertising spend. Together, I believe we can deliver the most engaging and innovative rich media experience for Australian audiences and advertisers.”

Executive chairman of Seven Network Limited, Kerry Stokes, said: “We are building on our strengths to create a broad media company focused on the delivery of relevant content to all Australians across a number of delivery platforms. Yahoo! is the global Internet leader and their focus on developing compelling content to engage with online audiences complements our strategy.”