Verizon, MSN Team Up on Broadband

Verizon will make MSN sites and services the default choice for its high-speed DSL subscribers beginning in 2003, increasing MSN’s reach among broadband users. Under the deal, all existing and new Verizon DSL subscribers will receive a cobranded Web browser with links to MSN sites and services, including new MSN services tailored to broadband users. Customers will have a choice of Web-based e-mail accounts with either company’s domain name, and they will be able to choose which company will bill them. Verizon will handle all support and will promote other products such as long distance phone service via a comarketing deal. Revenues from the cobranded service will be shared between the companies, although exact terms were not revealed.

The deal lets MSN promote its sites and services to 1.4 million DSL users (out of the 4.5 million total in the United States) and helps MSN compete against Yahoo, which in May 2002 signed a similar deal with SBC Communications for dial-up users. It also builds on an earlier deal under which Verizon agreed to resell MSN Mobile, Microsoft’s services for wireless users. (See “Verizon Deal Shows Mobile Strategy” on page 18 of the July 2002 Update.)