"Seven and Yahoo will form a new 50-50 holding company that will own Yahoo Australia and New Zealand," according to a joint statement this afternoon. Both companies will combine their online teams to form a 150-strong company which will launch with a new name and Web site on January 30.
The agreement mirrors one between Nine Network owner Publishing and Broadcasting Ltd and Microsoft, which in 1997 formed a similar alliance to create Australia's most popular Web site, ninemsn.
"The vision for the combined teams is to create the best entertainment, information and communications experience for Australian Internet and mobile users."
"Seven will also contribute AU$10 million to match the existing development capital in the business, offline promotion throught the Seven network and Pacific Magazines, as well as Seven's 33 percent stake in mobile solutions provider m.Net," the companies 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," said Yahoo chief executive Terry Semel in the statement.
"This is the best combination to benefit from increased broadband penetration, rich media consumption, and the growing cross-media advertising spend," he added.
Yahoo said it was committed to keeping all local services intact, but will also use content from Seven.
"New consumer offerings will ultimately be available across online, mobile and IPTV in areas such as news, sports, entertainment, TV, games, music and travel," the companies said.
The online properties of both organisations will largely stay the same, the companies said in a conference call this afternoon, although the broadcaster plans to use Yahoo's registration functionality for its Web site.