Yahoo reels from loss of 15-year AT&T contract
YAHOO'S struggling Internet business took a hit on Wednesday with the loss of a long-time contract to manage the Internet portal and search for United States telecommunications giant AT&T.
AT&T confirmed that it is switching to Synacor, ending a business tie it had with Yahoo for 15 years.
Synacor, which is based in New York state, said in a release that it expected the contract to bring in US$100 million (S$135.5 million) in revenue annually after it is fully implemented in 2017.
The loss of the AT&T business was likely unwelcome news at Yahoo, which is in the process of trying to sell the company as part of a spin-off of lucrative shareholdings in Chinese Internet colossus Alibaba.
Yahoo reported a loss in the first quarter of this year as the struggling Internet pioneer continued to court potential buyers and examine other strategic options.
The company reported a net loss of US$99 million in the first quarter, compared with a US$21 million profit a year earlier.
US telecoms giant and AT&T rival Verizon has emerged as a leading contender to take over Yahoo as other big names reportedly drop out, according to US financial media.
Although Yahoo is one of the best-known names on the Internet, used by around a billion people, it has fallen behind Google in web searches and been steadily losing ground in online advertising.
In February, Yahoo said it was cutting 15 per cent of its workforce and narrowing its focus as it explored "strategic alternatives".