MEDIA: SPOTLIGHT ON BT YAHOO! BROADBAND - Will Yahoo!/BT deal move us closer to broadband Britain?

What will the recent Yahoo! deal with BT mean for the ad industry?

To date, no-one has actually said very much about the embarrassing error in BT's blockbusting commercial for its broadband services earlier this year - the one where we have to imagine that the BT conduits under the streets are really pipelines containing ... well, just about anything you can imagine.

When the pipe ruptures like a water main, all sort of things come raining back down again, including a rhino. Ludicrous. It should, of course, have been a dinosaur. A big one. You know - weighs as much as a small country, lumbers about grubbing up trees, brain the size of a walnut.

Because BT, despite regular attempts to convince itself that it can move with all the subtle elegance of a rhino, resembles that dinosaur - and nowhere is this more apparent than in the field of broadband internet. Although BT has been supposedly central to governmental visions of a broadband Britain, it has often been slow, not to say reluctant, to push this forward.

And it certainly hasn't used its dominance in the UK telecoms market to any great effect. Quite the reverse, you could argue. Just three years ago, it was arguing that broadband was going to be of peripheral interest to the future of the company. Then, with the arrival of its new chairman Ben Verwaayen, it about-turned and set ambitious targets - one million broadband customers by the end of this year and five million in three years.

Unfortunately, it got all confused about whether it was going to achieve this target all by itself through its BT Openworld connectivity-plus-portal product; or whether it was going to push Openworld while at the same time helping the likes of Freeserve and AOL too, by giving them reasonably priced broadband connectivity for their own products.

After all, BT is primarily a utilities company. But the likes of Freeserve and AOL couldn't be blamed if they felt that BT has basically continued to abuse its monopoly position.

Well, they aren't going to be any happier about the latest development - last week's alliance deal that saw BT teaming up with Yahoo! to provide a new broadband product. It was touted as a win-win situation, with BT getting the content and services (for instance, huge amounts of inbox capacity and storage space on the web) it has always lacked on its Openworld portal and Yahoo! getting increased access to the eyeballs belonging to Openworld customers.

BT Openworld will be scrapped and the new service will come online as BT Yahoo! Broadband. Shame about the £60 million it has spent on the Openworld rhino campaign - but it obviously hopes that not all of that effort has been totally wasted, and that a generic message about the benefits of broadband has sunk in.

We'll see. But what does the market think? Is this deal good for broadband Britain? BT hit its one million target a few weeks ago and growth in cable homes has been impressive. The figures for BT's DSL technology were already healthy before the Yahoo! deal, weren't they?

Well, yes and no, Nick Suckley, the managing director of, responds.

"It's true that some of the recent growth figures have been encouraging," he concedes, "but, in terms of percentage of homes connected, we're still way down at the bottom of the table, just ahead of Italy."

Suckley likes this deal though - both parties can claim to have plugged holes in their long-term business plans and it certainly puts Freeserve and AOL on the back foot. For advertisers, it doesn't really diminish choice but it does hold the promise of a better product with more viewers.

Robert Horler, the managing director of Carat Interactive, tends to agree: "They are well matched. It's good from Yahoo!'s point of view because its approach, especially in the US, has been to deliver content that people are prepared to pay for. From an advertiser point of view, Yahoo! now has a great product and a sales team to go with it. This deal arguably puts it further up the food chain and perhaps helps bring some of its peripheral (content) propositions more centre stage."

There are some who harbour reservations, however. Surprisingly, some digital agencies are becoming nervous about the whole notion of hyping broadband - and we could see another £60 million injected into another rhino-sized campaign for Openworld's successor. Doubters believe that BT will try to force its current narrowband customers to trade up while making it less and less appealing for new customers to buy anything but broadband. It will be like the migration from analogue to digital in multichannel TV.

But currently there's a real question about how to promote broadband because no-one wants to see another WAP, where there is huge initial excitement and then people discover there's nothing actually there. Broadband has to deliver something and, currently, you could argue that content providers are just not justifying even modest levels of hype.

Others point out other potential risks, especially for BT. The whole point about broadband, they say, is that it encourages users to behave in a more sophisticated manner when they're online. They use it to increase their scope and freedom - and they ultimately come to resent being spoon-fed content and services through a portal run by their connectivity provider.

Again, though, that's all supposition. In the here and now, Martin Kelly, the head of media at Tribal DDB, says, it's a good deal in anyone's money.

"It's something of a shame that BT had to ditch the brand and it has been spending a lot of money developing the content side of the business, buying things like games and music. But it makes sense for it to concentrate on what it's good at and get in Yahoo! to do the stuff it's weak at," he states.