Yahoo!7 creates joint venture with Xtra

Thursday, December 14, 2006

Xtra, owned by New Zealand telecommunication monopoly company Telecom, has created a joint venture between themselves and Yahoo!7, creating Yahoo Xtra. Yahoo!7 is the joint venture between Yahoo! and Australian network, Seven.

The join venture replaces the current and long-lasting partnership between Microsoft and Xtra, called XtraMSN. The current partnership’s contract will expire at the end of this year. Telecom chose to change the partnership because Yahoo! has worked together with BT Group, Verizon and Rogers Communications.

The new site, along with new online content will go online on around March 1, 2007.

The partnership will result in Yahoo!7 taking 51% control of the partnership and Xtra taking the remaining 49%.

Kevin Kenrick, chief operating officer of Telecom, said that they will now be able to target the underdeveloped online advertising community. “We see there is a fantastic opportunity to grow online advertising and the share of the online market. Online advertising in New Zealand is getting to a tipping point of growth where there is a critical mass of online connections, broadband connections and an increase in the amount of time people are spending online.”

When the new site is launched, it will include a range of news, sport, weather, enhanced e-mail spam and virus protection, photo sharing, and internet radio.

Theresa Gattung, chief executive of Telecom, said: “The Yahoo Xtra joint venture will provide New Zealanders with access to the world’s best online services in a localised way.”

Ian Smith, chief executive of Yahoo!7, said: “The company was achieving market growth of online advertising of between 50 and 60 per cent a year in Australia and believed it could do the same in New Zealand.” He said that the partnership will give them a great opportunity to showcase its tools, technology and platforms in New Zealand.

Mr Kenrick said that the reason they had gotten a partnership with Yahoo!7 was that it is very difficult for a small player to develop its services in a New Zealand size market.

One other online company Xtra had considered for the partnership was Google, among others. The reason they chose Yahoo!7 over other companies was because Yahoo!7 has the top position in big fields such as TV and video. Mr Kenrick said: “The whole area of content management is one we thought would benefit from others with greater expertise and more scope.”

Telecom manages 80% of the telecommunication market.