Yahoo and Telemundo in Online Deal

Yahoo Inc. and Telemundo announced plans to combine their U.S. Spanish-language websites Wednesday, a move they hope will help capture a larger part of a rapidly expanding Latino online audience.

The new site, Telemundo.yahoo.com, will blend Yahoo’s en Espanol’s e-mail, search and music services with access to content from the juicy telenovelas and entertainment that attract Telemundo.com’s audience.

Executives at NBC Universal’s Telemundo, an entertainment unit of General Electric Co., and Yahoo said the new entity would better target consumers and advertisers within the U.S. Latino market.

Greg Coleman, executive vice president for global sales at Yahoo, said the combination “will provide the most comprehensive experience for U.S. Hispanic consumers and extend both companies’ strong position in U.S. Hispanic media.”

Media and marketing companies are increasingly trying to reach Spanish-speaking Internet users in the U.S. In 2005, there were 15.7 million Latino users, with the number projected to grow 33% by 2010, according to EMarketer Inc., a New York-based Internet marketing firm.

For Yahoo, teaming up with Telemundo will give it a key presence in the Latino market, said Jose Rivera Font, general manager of Yahoo North Latin America.

“Yahoo is not in the business of creating Hispanic relevant long-form content such as movies and telenovelas,” he said. “The company needs the relationships that Telemundo has made over the years.”

Font also said the site might be bilingual, recognizing that many Latinos raised in the U.S. are more comfortable speaking English.

The merger will position the companies to more directly compete with Los Angeles-based Univision Communications, whose site, Univision.com, offers e-mail accounts as well as news and entertainment content.

“A consolidation of two of the stronger players online puts pressure on the other players,” said Debra Aho Williamson, senior analyst at EMarketer.

The Yahoo-Telemundo combination will be immediately successful because of its reach, said Peter Blacker, senior vice president of digital media at Telemundo.

He said the two companies estimated that the new site would draw about 11.5 million Latino Internet users a month in the U.S. Additionally, “because Telemundo, owns and manages its own content, we can cut and change our content in different individual ways -- no competitor has that ability,” Blacker added.

Sunnyvale, Calif.-based Yahoo and Hialeah, Fla.-based Telemundo will combine some staff and advertising revenue, but will not make a direct equity investment.

The companies will hire a joint New York-based sales team to manage advertising, keeping primary content and technology operations at their respective headquarters. Over time they will promote the new combined site on their respective websites, eventually folding them into Telemundo.yahoo.com.

For marketers, the ability to target a large diverse group on one site will be very appealing, said Jose Guillermo Tornoe, consultant for the Latino division of Wizard Academy, a marketing and advertising consulting firm based in Austin, Texas.

“I see a great marketing opportunity in this merger,” Tornoe said. “Hispanics are influencing the general market in so many ways, so to an extent, they’re creating a new general market.”