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Yahoo! ready to rumble2 May 2007
Here comes an Internet giant.
Yahoo! UK & Ireland launched its first attempt at real-money poker, coupling the power of 20.7 million unique visitors per month with a trusted brand to attract customers in countries friendly to online gambling.
Party Poker CEO Mitch Garber said a few years ago, the real competition starts when the Internet giants enter the market.
And Yahoo! is ready for the fight to begin.
"The established gaming sites such as Party Gaming and 888 will be concerned and if they are not, they should be," Yahoo! spokesperson C.J. Stanley said.
The U.K. and Ireland have about 64 million inhabitants combined. That means Yahoo! UK & Ireland draws an audience about one-third that size per month.
Even with a minimal conversion rate, like .5 %, Yahoo! UK & Ireland could expect to register more than 100,000 online poker players, immediately placing them in league with industry leaders PokerStars and PartyPoker.
Yahoo!'s success is not guaranteed, but according to River City Group Director of Publishing Mark Balestra, "they definitely have a recipe for success."
"Things are shifting within the (online poker) space," Balestra said. "The trend we're seeing is large non-gaming entertainment brands (like Yahoo!) entering the market. They have their own community, a trusted name, and large user database."
According to Balestra, Yahoo! has had their eye on the industry for years, starting with their launch of real-money bingo two years ago. And for years, Yahoo! has offered play-money skill games.
Yahoo! isn't the only entertainment brand or Internet Service Provider with their eyes on Internet gambling. America Online offers free-money play as does Microsoft. Industry analysts like Balestra are openly wondering if Yahoo! is successful in Europe - how long will AOL, Microsoft, Google and E-Bay stay away?
Land-based casino brands will also follow Yahoo!'s performance closely. It's no secret that the land giants would like to break into the online marketplace - it's just a matter of where and when. A successful European entry for Yahoo! could force others into that space.
The Sands, a Las-Vegas-based gaming brand, announced last December plans to open a real-money online casino in the U.K. The World Poker Tour also recently signed a deal with software-provider Cryptologic to open an online poker room in Europe.
Larger online gambling brands, like PokerStars, 888 and Party Gaming have long dominated the online gaming world, operating without the presence of established entertainment and casino brands in their arena. This has allowed them to thrive, despite the obvious legal challenges, Balestra said.
Smaller brands have also succeeded without major outside competition, using affiliate programs and player networks to continually grow the type of player liquidity needed to compete with the industry leaders.
But the outside interference has finally arrived and Bolestra feels things may change. Affiliate programs currently drive the industry, herding the gambling masses to the established online brands.
Yahoo! is bucking the time-tested online marketing trend of using affiliates by turning to a different type of draw - the power of its trusted brand and databases.
"I see Yahoo! taking real-money players as a threat to the current market," Casino City account manager Rebecca Liggero said.
Stanley said his company does not have an affiliate program, nor do they plan to add one. His company has been successfully running real-money bingo for two years without using affiliates.
"Players, especially new ones, are more likely to trust a brand like this," Balestra said.
Yahoo!'s entry into the European market confirms that Europe has become the focus of the online gaming industry. Yahoo!'s results there could shape the industry for years because it will be the measuring stick for future entertainment brands.
Yahoo! joins the UK-based St. Minver gaming company, which is partnered with the online gaming's super-software provider Boss Media. Other brands running Boss Media software include SportingBet, William Hill, Virgin, and bwin.
Yahoo! Poker is part of St. Minver's and Boss Media's International Poker Network (IPN). The IPN is currently the 12th-largest poker network on the Internet, according to www.pokersitecout.com.
Last week, www.pokersitescout.com listed an IPN average of 1,603 cash players per day. By way of comparison, PokerStars and PartyPoker averaged between 5,000 and 8,000 cash-game players daily.
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