Struggling Yahoo has taken a major blow, losing a lucrative contract to a rival from Buffalo, N.Y. that said it expected the work to bring in $100 million a year. The hit to the firm’s revenue stream will certainly not boost the bidding for Yahoo, which put itself up for sale in February.
Telecommunications titan AT&T told the Wall Street Journal that after having Yahoo host its Web and mobile portals for 15 years, it’s giving the contract to Synacor. That company told the paper that after ramping up over the next year, it should bring in $100 million annually from the contract. Analyst Sameet Sinha at B. Riley & Co. estimated to the WSJ that the deal had brought that amount to Yahoo every year.
AT&T said Synacor would manage its att.net portal, branded applications and search.
Yahoo, which is currently for sale, told the paper only that AT&T was still a “valued partner.” AT&T competitor Verizon is reported to be a leading contender to buy Yahoo.
Analyst Youssef Squali at Cantor Fitzgerald told the paper that Yahoo’s loss of the contract was “another indication that Yahoo is losing appeal with its partners.”
The WSJ noted that a loss of revenue could cut suitors’ interest or reduce the amount a buyer would pay.
Photo: Yahoo headquarters in Sunnyvale (Justin Sullivan/Getty Images)
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