Yahoo!7 buys Telecom's share of NZ JV Yahoo!Xtra

Stuart Corner
Friday, 15 April 2011 16:49

IT Industry - Deals

Telecom New Zealand is pulling out of Yahoo!Xtra, its ISP joint venture with Yahoo!7. Yahoo!Xtra will now become a wholly-owned subsidiary of Yahoo!7, itself a 50/50 JV between Australia's Seven Network and Yahoo!.

Telecom New Zealand owned 49 percent and Yahoo!7 owned 51 percent of Yahoo!Xtra. The Yahoo!Xtra business will rebrand to Yahoo! New Zealand with all Yahoo!Xtra staff remaining employed by Yahoo! New Zealand.

Alan Gourdie, Telecom Retail CEO, said that, in the coming months customers would notice changes to the branding on the site. "However Yahoo!7 and Telecom remain firm partners. Yahoo! New Zealand will continue to deliver Telecom customers the same services as today such as Yahoo! Mail, Flickr and My Yahoo!."

He said the sale was not material for Telecom NZ and would not result in any change to guidance.'

The sale marks that latest in a long history of changing ownerships for the ISP. It started life in 1996 as Xtra, an arm of Telecom NZ and quickly became the country's largest ISP. In 2001 it was merged with msn.co.nz (the Microsoft Network) New Zealand to become XtraMSN and Microsoft invested $NZ300m in Telecom in the form of convertible notes.

XtraMSN lasted until December 2006 when Telecom announced the formation of Yahoo!Xtra, spinning off msn.co.nz once again. Its announcement at the time gave no reason for the move

Announcing the latest change, Gourdie said: "The Yahoo!Xtra business has been extremely successful over the past few years. The Internet is a fast moving industry and it makes sense for both businesses to evolve the ongoing relationship."

According to The Dominion Post, Yahoo!Xtra last month reported a 37 percent rise in annual profit to $NZ1.9m. Its revenues, which come from display and search advertising, rose to $NZ10.5m from $NZ9.4m in 2009.