SBC to Buy 3% Stake in Yahoo From Softbank

SBC Communications Inc. said it agreed to buy about a 3% stake in Yahoo Inc. from Softbank America Inc., expanding an alliance the No. 2 local phone company formed with the Internet media giant in November.

Softbank America, a unit of Japan’s Softbank Corp., said it will remain Yahoo’s single largest shareholder after the deal with a stake of more than 16%.

Terms of the SBC deal were not disclosed. The equity sale will close in the first quarter of 2002.

In November, SBC and Yahoo agreed to offer a co-branded, premium DSL Internet and dial-up service that is expected to be launched in mid-2002. Yahoo has been trying to find new ways to make money at a time when advertising spending has hit one of the worst slumps in recent history.

Shares of Yahoo rose 26 cents to $17.77 on Nasdaq, while SBC climbed 57 cents to $39.69 on the New York Stock Exchange.