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AT&T Terminates Its 15 Year Partnership with Yahoo

By CIOReview | Tuesday, May 10, 2016

FREMONT, CA: Since 2001, Yahoo had been solely responsible for the portal; the AT&T branded applications and search for the company which generated profits in the range hundreds of millions of dollars. Synacor, a lesser known company in telecom circles has now bagged (grabbed?) the contract from AT&T. Yahoo’s service to AT&T has now been reduced to host email service for the company which according to sources is just a small fraction of what Yahoo originally had. A Yahoo spokeswoman commenting on the new development said AT&T was still a ‘valued partner’ to the company but denied to comment further.

This is apparently a blow for Yahoo who is in talks with prospective buyers who would want to buy the business. Notably, one of the bidders of Yahoo is AT&T’s rival in telecommunication business Verizon Communications Inc. According to analysts the loss of the deal is indicative of Yahoo losing appeal with its partners. Yahoo, over the past years had been experiencing an unstable ride despite the efforts of its CEO Marissa Mayer who previously served Google.

On the other hand, Synacor’s three year deal with AT&T has led to its share value sky rocket to more than double its previous worth. Himesh Bhise, Chief Executive at Synacor, said the deal would bring in $100 Mn in 12 months time once all the services and features of the deal had been deployed. The company, which faced pressure from its investors would split the ad and display revenue with AT&T just as the previous deal between Yahoo and AT&T was like. Mr. Bhise also said the deal had put the company on a track of being three times its size in three years time.