Yet again, there are more signs of the convergence of traditional and interactive media. This week, Yahoo! (Nasdaq: YHOO) and Telemundo, the Spanish-language television network, announced a new website, aptly named Yahoo! Telemundo. Telemundo is owned by NBC, which is part of GE (NYSE: GE).
Actually, the venture is the merger of Yahoo!'s Spanish-language site with Telemundo.com. The new site will be located at telemundo.yahoo.com.
In the deal, both companies will combine existing staff and resources. There will not be any equity investment, though. In terms of the economics, there will be a revenue split (which will likely include mostly advertising revenues).
Interestingly enough, the focus is not international; rather, the target audience is the U.S. Latino market, which continues to grow at a healthy clip. It's also becoming more affluent and connected to the Net.
According to a study by EMarketer, there are 15.7 million Latino Internet users in the U.S. And the growth rate is expected to be 33% per year to 2010.
No doubt, Yahoo! will leverage the existing content of Telemundo -- especially as online video becomes much more popular. What's more, Yahoo! Telemundo will have an extensive reach, with more than 11 million unique users. That's certainly something that can be effectively monetized with advertising revenues.
However, the big play for Yahoo! is for the long term. While online text ads have become a huge business -- dominated by Google (Nasdaq: GOOG) -- this is likely to change as broadband becomes more ubiquitous. That is, online advertising is likely to expand into multimedia advertising. Thus, Yahoo!'s combination with Telemundo will also help it in developing this type of business.
Moreover, Yahoo! has had difficulties creating its own content. So it wouldn't be surprising to see Yahoo! make similar deals with traditional media companies over the next year or so as the online giants gear up for the battle over multimedia advertising.
Fool contributor Tom Taulli does not own shares mentioned in this article.
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