PW: Varsitybooks, AOL Ink Pact

Looking to strengthen its hold on the college demographic, Varsitybooks.com has signed a deal with America Online to become the official bookseller on the Internet company's ICQ interactive community service. In exchange, AOL received a 3% stake in Varsitybooks.com.

Under the deal, Varsity will become the official bookseller on ICQ for three years. The arrangement will provide for banner advertising, opt-in marketing, placement on shopping channels and a customized bookstore. The company will also become the official bookseller on AOL's Instant Messaging, or IM, service.

The deal continues Varsity's bid to serve as not only a vendor to but a lifestyle company for college students. Late last year, the company launched its own e-mail service for students. This marks the second time it has used stock to sweeten a deal and strengthen its business. Baker & Taylor owns nearly one-quarter of the Washington, D.C., startup, thanks to its drop-shipping agreement with the bookseller.