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A big win for Synacor.

A little-known telecom stock is soaring after the company nabbed a major AT&T deal from Yahoo

Ashley Rodriguez
By Ashley Rodriguez


Shares in a small-time technology company from Buffalo, New York, are soaring today (May 5) after the firm snatched a major AT&T deal away from Yahoo.

Little-known outside of the telecommunications world, Synacor provides private-label web portals for brands like Verizon and Charter Communications.

On May 4, after the close of US markets, it announced a three-year deal to manage AT&T’s web and mobile portals, as well as search. Synacor estimates the contract will bring in $100 million in revenue a year by 2017. At that rate, the company reportedly could triple in size (paywall) over the life of the contract.

Synacor’s shares closed at $1.41 yesterday and shot up 170% in pre-market trading. The stock opened today at $3.81.

Synacor’s deal with AT&T pulls the rug out from under a 15-year-long partnership between AT&T and Yahoo, which used to hold the telecom giant’s web-services contract. Now, Yahoo will only host email for AT&T customers.

The move couldn’t come at a worse time for the badly flagging internet and media company, which is currently shopping for a buyer. Yahoo’s shares have tumbled over the last year and were down nearly 13% from a year ago, as of yesterday’s closing bell.

Yahoo investors don’t seem too discouraged by the loss of the AT&T business, though. The company’s shares were trading up nearly 4% at the time of this writing. Perhaps, it’s because telecom rival Verizon is a top contender to buy the firm.

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