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Amazon.com Inks $19M AOL Pact; Plus Deals with Yahoo!, Excite

by Calvin Reid -- Publishers Weekly, 7/10/1997

Competition stepped up between the two top online booksellers last week after Amazon.com announced a series of multi-million dollar promotional and content partnerships with America Online and Internet search engines Yahoo! and Excite that will route millions of web visitors to the Seattle-based online bookseller.

In the biggest transaction Amazon.com signed a three year agreement to become the exclusive bookseller for the America Online website (http://www.AOL.com) and, through a new navagational tool, will be linked with the site's NetFind search engine.

Amazon.com will pay AOL $19 million over three years with the possibility of increased payment if Amazon.com's sales exceed specified thresholds. Amazon.com will get a button "above-the-fold" (i.e., no need to scroll down) on AOL's web homepage. The agreement makes the two biggest online bookselling competitors, BarnesandNoble.com and Amazon.com, virtual twins in AOL's cyberspace commerce. BarnesandNoble.com is currently the exclusive bookseller on AOL's proprietary service. AOL is the largest online service with 8 million subscribers and its website is one of the most heavily trafficked sites on the web with millions of visits everyday.

Jeff Bezos, president and CEO Amazon.com, told PW, the partnerships "bring together three of the most important online aggregators and will dramatically increase our ability to help book publishers find their customers. These partnerships will allow millions of people to see their books." The deals provide for extensive promotions and banner advertising through the websites.

According to Bezos whenever a web visitor keys a search into AOL's NetFind, Yahoo! or Excite, the search engine will key into Amazon.com's database and automatically link the web visitor's search to a list of related books which can be purchased through Amazon.com. In addition on Excite, Amazon.com will create new content by providing a regularly updated listing of titles for each of the subcategories in Excite's index listings. "This will provide huge promotional opportunities for publishers," said Bezos. Bezos declined to speculate on future deals and also delcined to give details on the financial terms of the partnerships Yahoo! and Excite.