Electronic media group Seven Network Limited and online portal Yahoo! Inc will combine their online, mobile and IPTV businesses in Australia and New Zealand in a bid to compete with the Microsoft-PBL joint venture ninemsn.

The strategic partnership brings together Yahoo!’s Australian internet business, Yahoo! Australia & NZ, and the online assets and television and magazine content of Seven Network. This will be Seven's second attempt at forming an online media joint venture, after its failed three-year partnership with AOL ended in 2004.

Under the terms of the agreement, Seven and Yahoo! will form a new 50-50 holding company that will own Yahoo! Australia & NZ. Seven and Yahoo! will each hold three of the six board seats in the entity.

Executive chairman of Seven Network Limited, Kerry Stokes, said: “We are building on our strengths to create a broad media company focused on the delivery of relevant content to all Australians across a number of delivery platforms. Yahoo! is the global Internet leader and their focus on developing compelling content to engage with online audiences complements our strategy.”

Yahoo! Australia & NZ and Seven will be combining their online teams, with Seven supplying 30 staff and Yahoo! 85 staff, and are expected to launch a new name and online presence in late January, coinciding with Seven’s coverage of the Australian
Open and the Olympic Winter Games in Torino, as well as the opening weeks of the 2006 television season.

Chairman and chief executive officer of Yahoo! Inc, Terry Semel, 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. This is the best combination to benefit from increased broadband penetration, rich media consumption, and the growing cross-media advertising spend. Together, I believe we can deliver the most engaging and innovative rich media experience for Australian audiences and
advertisers.”

New consumer offerings have been promised across online, mobile and IPTV in areas such as news, sports, entertainment, TV, games, music, and travel. Seven will also contribute $10 million to match the existing development capital in the business, offline promotion through the Seven Network and Pacific Magazines, as well as Seven’s 33% stake in mobile solutions provider m.Net Corporation Ltd, which is subject to obtaining required consents.

Advertisers will also be able to purchase combined offline and online sponsorships across Yahoo! Australia & NZ, the Seven Network and Pacific Magazines.