Lost amid the hoopla of Microsoft's unsolicited $44.6 billion bid for Yahoo!, AT&T this month renegotiated its broadband portal deal with Yahoo! — with much improved terms for the service provider.

The original Yahoo! deal — cut with AT&T acquisitions such as SBC — included revenue guarantees and broadband bounty fees paid by Yahoo! to AT&T. In the new arrangement, AT&T gets Yahoo! content and e-mail services wrapped up in a soon-to-be-revamped att.net portal in exchange for an ad revenue split on AT&T Web and mobile sites. However, both Web and mobile searches will feature AT&T's YellowPages.com as the engine, not Yahoo!'s search results.

Overall, the deal means less guaranteed money for Yahoo!, but it could result in greater revenue for the company if Web and mobile advertising in particular take off on AT&T properties. Yahoo! recently renegotiated a portal deal with Rogers Communications under similar terms.

The AT&T/Yahoo! deal demonstrates a shift in the Web/telco power positions, with service providers now able to cut better deals with their portal partners. Yahoo! — which has stated a goal of becoming the “start” page for as many users as it can — clearly remains interested in service provider partnerships. Google, on the other hand, is being viewed with more caution by carriers due to its wide-ranging mobile device and wireless services ambitions.