News
Contract with U.S. telecoms giant expected to generate $100m a year for Synacor.
AT&T awarded the contract to host its Web and mobile portals to Synacor in a move that takes away a significant amount of the U.S. operator’s business from Yahoo, reports the Wall Street Journal.
A source close to the deal told the paper that Yahoo would continue to host email for AT&T customers, but that this represented a fraction of the business the telecoms giant had previously entrusted to the Internet firm during their 15-year partnership.
Sameet Sinha, an analyst at Briley & Co., estimated that the AT&T partnership generated about $100 million in annual revenue for Yahoo, the WSJ added.
The decision by AT&T also comes at a particularly sensitive time for Yahoo, which is in talks to sell itself to bidders including Verizon Communications.
Synacor, meanwhile, confirmed in a press release that it has won the portal services contract from AT&T with expected annual revenues of around $100 million from 2017 once services have been fully deployed. Initial deployments are expected to start in the second quarter of 2016.
The WSJ noted that Synacor is little known outside of telecoms circles. The company said it will develop and manage desktop and mobile portal services designed to drive user engagement; populate these experiences with rich content sourced from popular brands; and monetise these experiences through search and advertising
Synacor CEO Himesh Bhise was clearly delighted to have won a major deal from such a significant player.
“We are thrilled that AT&T will be using our managed portal services, mobile apps, and advertising solutions in this important initiative to deepen engagement with their customers. We already are developing initial products for deployment in 2016, and have started working on a next-gen product for 2017,” he said.
MarketWatch reported that Synacor’s share price jumped 130% to $3.25 following the announcement.
