Yahoo Looks to Refresh Itself at Starbucks

Starbucks and Yahoo announced Wednesday the launch of Starbucks Digital Network. The network goes live immediately in Starbucks’ 6,800 U.S. company-operated stores, presenting a collection of hand-picked news, entertainment, lifestyle and local content developed for laptops, tablets and smartphones. The connection is via Starbucks’ free WiFi.

The network sports a Starbucks-specific design. It offers six channels: News, Entertainment, Wellness, Business & Careers, My Neighborhood and Starbucks. Content providers include LinkedIn, New World City, The Weather Channel, Bookish Reading Club (free access to books from publishers including Hachette Book Group, HarperCollins, Penguin Group and Simon & Schuster),Foursquare and GOOD.

During its first week, the network will offer a preview of a new novel by Anita Shreve and free access to two songs and a video from the new band Fistful of Mercy featuring Ben Harper and Dhani Harrison, son of the late Beatle, George Harrison.

Customers can access a social media marquee on the footer of the home page that links to Facebook. Twitter, My Starbucks Idea and YouTube. Yahoo will also offer search capabilities that will take users to Flickr, Yahoo Sports, Yahoo Finance and Yahoo News.

What’s in It for Starbucks

Starbucks sees the partnership as the next step in an ongoing process to provide Internet connectivity and unique content to customers.

“Digital communities present a great place to engage our customers, so it seems only fitting we introduce the next phase of our digital strategy within the four walls of our coffeehouses,” Adam Brotman, vice president of Starbucks digital ventures, told the E-Commerce Times.

Starbucks wants to create a stronger connection to customers who seek online content at its stores.

“We have sought to make authentic connections with our customers in new ways, becoming active in social and digital media — with Facebook, Twitter, YouTube, My Starbucks Idea and mobile,” said Brotman. “Starbucks Digital Network is a natural progression for Starbucks.”

Yahoo developed the site uniquely for Starbucks.

“We’re actually bringing a product to the partnership,” Kristy Cook, Yahoo’s senior director of partnerships, told the E-Commerce Times. “We have the technology knowhow. We bring sites to market around the country every day.”

Ultimately, Starbucks wants to draw people into its stores and keep them long enough for one more cup of coffee as they peruse online content.

“It’s a great idea for Starbucks. If you offer access to content and services for free, it’s a good thing for customers, Charles King, principal analyst at Pund-IT, told The E-Commerce Times.

What’s in It for Yahoo

The benefit to Yahoo is exposure to online traffic that may not already be hooked into Yahoo.

“Benefits to content partners could include elevation and awareness of their brands to Starbucks’ broad spectrum of customers,” said Brotman. “Some of the providers offer subscription services which customers may choose to join so they can access the content outside of Starbucks.”

While the two companies did not reveal any financial terms of the partnership, Brotman noted that Starbucks does have revenue-sharing deals with some of the content providers related to customer purchases and subscriptions.

Visibility is one of the benefits Yahoo seeks in the partnership.

“In terms of what’s in it for us — for one, brand affiliation,” said Yahoo’s Cook. “That’s important to us. With the Starbucks partnership, we’re able to showcase some of our technology to new users. And it also gives us the chance to experiment with the technology.”

Starbucks has a reputation for creating unique content agreements, often offering music releases exclusively at Starbucks stores, noted Pund-IT’s King. Yahoo now becomes one of those exclusive partners.

“Starbucks has a long history of innovations,” he remarked. “Working with a high-profile partner like Starbucks is definitely a good thing for Yahoo.”