Yahoo! BB: It's the Price, Stupid

Joseph Laszlo | April 25, 2003, 04:40 PM

Three cheers for Yahoo BB! That's the Softbank-backed, Japan-based broadband service from Yahoo. I just published a Jupiter report on the global broadband landscape, calling out keys to success. Had a chance to polish up my rusty Japanese skills taking a look around Yahoo! BB and was hugely impressed at the breadth of the marketing efforts they're undertaking, and the features that they offer (hotspot access bundled with home network bundled with 12Mbps DSL, anyone?), compared to the anemic, slow broadband services available here.

AND, it's working. Yahoo BB has reported huge profits resulting from cheap DSL. 2.36m subscribers at the end of Q1, making it the largest broadband provider in the country. SBC's reporting 2.5m here, but not all of those are retail lines; some of them were sold by other firms.

The Bell companies argue DSL has to be expensive; that they're barely making money off it as it is. They use DSL deployment promises as a carrot to get the FCC of their backs. Yahoo BB is turning in record profits off a $20-$30 a month service, and it doesn't even own the lines over which it's providing service. It doesn't take an analyst to wonder about that.