Yahoo Just Launched an Unlimited Prepaid Mobile Phone Service on the Verizon Network

Verizon has done so little with the Yahoo brand since it acquired it three years ago that you may not even be aware that the venerable web services company is actually owned by the big U.S. carrier in the first place, but it looks like that’s about to change with Verizon spinning off a new second-tier wireless provider.

Verizon announced today the creation of Yahoo Mobile, a new service that will work on Verizon’s network and hopes to use the name recognition to draw more consumers into the Verizon fold.

Yahoo Mobile will offer only one package: a 4G LTE plan that will offer unlimited text, talk, and data, plus unlimited single-device mobile hotspot access and ad-free Yahoo Mail Pro all for $40 per month. By comparison, a prepaid unlimited plan from Verizon runs for $65 per month, while AT&T charges $45 monthly.

As The Verge points out, however, this feels like a somewhat lazy attempt on Verizon’s part to “recycle the Yahoo brand,” since it’s actually just a rebranded version of Visible, another spinoff prepaid MVNO that Verizon launched a little over a year ago, originally targeted at users with unlocked iPhones before expanding into selling devices directly. The Yahoo Mobile and Visible websites have a very different coat of paint on them, but underneath that, the content and information on them is virtually identical, and Yahoo Mobile even offers the Visible-branded phone insurance plan.

Verizon managed to acquire Yahoo almost four years ago for less than 4.8 billion — a price that fell considerably short of its $125 billion valuation after several hacking incidents resulting in steep discounts on the asking price.

While Verizon technically acquired all of Yahoo’s major assets in the deal, including web services like Flickr and Tumblr, what it was really after was Yahoo’s advertising technology; it sold off Flickr and Tumblr and let everything else sit on the shelf. In fact, Yahoo’s biggest announcements since the acquisition have been payouts for the aforementioned data breaches.

Why Yahoo Mobile?

Big telecom carriers frequently spin off smaller subsidiary brands as a way to diversify their business and try out new ideas without risking the dilution of their big brand. Verizon has long wrested with being viewed as a somewhat consumer-unfriendly carrier, so other services like Visible and Yahoo Mobile let the company appeal to a different crowd with a more hip branding and a simpler pricing structure.

Although Visible seemed to be targeted at a younger crowd, Yahoo Mobile could be an attempt to draw in less tech-savvy Gen-Xers and boomers who still have a warm and fuzzy feeling about the Yahoo brand from the fledgling days of the internet, not to mention the couple hundred million people that still use Yahoo Mail to this day. Verizon is undoubtedly hoping that the added perk of an ad-free Yahoo Mail Pro experience will be enough to draw in at least some of those users.

As for the Yahoo Mobile service, if it parallels Visible, users will get the same type of second-tier service, meaning that speeds could be slower than on a Verizon plan, especially a peak times, and the unlimited hotspot feature will be capped at 5Mbps, making it unsuitable for anything more than the most basic use. Needless to say, you’re not going to get anywhere near Verizon’s 5G network with this plan either.

However, not only will Yahoo Mobile include a Yahoo Mail Pro account, but you’ll actually need a Yahoo account to sign up for the service, which is setup using the new Yahoo Mobile app if you simply want to use your existing (unlocked) iPhone, although it looks like Yahoo Mobile will have phones available for purchase as well.