Yahoo buys Broadcast.com

The merger reflects the continuing consolidation of the Internet media sector in which a handful of companies are using their skyrocketing stocks as high-priced currency to acquire technology features and established audiences they lack.

Reacting to the news, Yahoo stock spiralled higher Thursday morning, jumping 11.62 to 180 while Broadcast.com climbed as high as 133, or 14.87 above Wednesday8217;s closing price.

The deal marks a small premium from Wednesday8217;s closing price but a huge pay-off compared with Broadcast.com8217;s mid-80sshare price two weeks ago, when deal rumors first surfaced.

8220;We8217;re really stoked about this,8221; said Tim Koogle, the sleepy but enthusiastic chairman of Santa Clara, California-based Yahoo, in a conference call with Wall Street analysts that began in the wee hours of the morning Thursday.

Koogle kicked off the conference call by joking that the agreement was, 8220;probably one of the worst kept secrets in the industry8221; 8212; a reference to the widespread leaks ahead of the formal announcement of the deal.

Yahoo said the company expects to record an unspecified one-time charge in the third quarter for expenses related to the acquisition of Dallas-based Broadcast.com.

The deal will draw Broadcast.com, which beams everything from presidential speeches, to investor conference calls to lingerie catwalk fashion shows, into Yahoo8217;s growing network of media, communications and electronic shopping properties.

Yahoo8217;s website serves more than 50 million different visitors per month. In a statement, Yahoo said theacquisition expands the multimedia content programming it can offer, enhancing its site8217;s appeal to viewers and to advertisers.

The acquisition positions Yahoo to take advantage of the growing demand for audio and video broadcasting over the Internet and the exponential growth in such programming that is expected to occur as millions of computer users upgrade to high-speed Internet connections in coming years.

The merger is the latest in a flurry of deals that has created a smaller number of big players in the Internet media sector. Recently, America Online Inc acquired Netscape, Walt Disney Co allied with Infoseek and AtHome Corp agreed to buy Excite Inc.