Yahoo and BT in Click! pact

Telecoms behemoth BT has spurned its own portal LineOne and signed a pact with Yahoo! Europe in a deal that aims to woo Net newcomers with a no-contract, pay-as-you-go package.

Yahoo! Click, which will be available on the Yahoo! UK & Ireland site from the end on 30 November, is a combined Internet access and Web guide service, with no monthly subscription fee, no registration and no contract. Users pay-as-they-surf.

This alliance marks the first step in a longer term strategy for Yahoo! Europe as it roams across Europe looking for ISP partners. It is a coup for BT, whose controversial pay-as-you-go Click! offer sent tremors through the UK ISP community which feared the telco was abusing its monopoly position.

But Fabiola Arredondo, Yahoo! Europe's managing director, countered this claiming that BT was following the market in pay-as-you-go, not leading it. "Energis and Dixons struck this type of deal before BT did. You cannot say BT is in a monopoly position. To date, it is behind."

"We aim to extend our portfolio to offer wider Net access. The Power of Yahoo coupled with BT's reliability is a very potent combination," Arredondo added.

There are roughly 6 million Internet users in the UK, and Yahoo! UK & Ireland scores some 44 million page hits a month. Arredondo declined to reveal the fiscal arrangement but said that the company would take a cut of the fees.

But Noah Yasskin, an analyst at Jupiter Communications, claimed that metered Internet services were purely for cyber starters. "Services like Click are for newcomers unfamiliar with the Web. ISPs should not be too worried as there is unlikely to be a massive migration to pay-as-you-surf."

BT's partnership with Yahoo shows how unsuccessful its LineOne venture has turned out to be, according to Yasskin. "It's a bonus for Yahoo as it gets extra traffic. But Yahoo! Click really blows BT's LineOne. It shows how foolish BT is -- in that it has no idea how to create a successful portal site. LineOne has turned out to be an unimpressive service."