One day after Yahoo unveiled big plans to take on America Online and upstart Snap Online, Excite weighed in today with an announcement of its own dealmaking that it said will bring in at least US$25 million in new revenues in the next several years.
Excite signed 10 contracts, averaging two to three years, to give prominent placement on the Excite and Webcrawler sites to the likes of Auto-By-Tel, CDnow, Consumers Car Club, First Auction, GolfWeb, Greet Street, and TMP Worldwide. In addition to traditional ad revenues, Excite will receive 25 percent to 35 percent of the net margins from transactions these sites conduct with customers coming from Excite and Webcrawler sites.
The $25 million Excite expects to receive from the contracts represents only the guaranteed revenues from ads and partnership fees. Excite's take from transactions made through its sites was too speculative to include in the estimate, and could boost the value of the agreements even higher, said Robert Hood, Excite's CFO.
The agreements represent the latest push among search engines to move the online service model - developed and dominated by America Online - to fee-free directories on the Web. Excite said in a statement that the partnerships are designed to "accelerate the company's move to a free online service," an aim it shares with sites such as Yahoo and the Microsoft Network.
Wall Street showed its approval of the move. Excite's stock rose 20 percent to $34.38 today. The announcement failed to upstage Yahoo's aggressive tactics, though. In addition to its own partnerships with TMP and Concrete Media, Yahoo this week bought the Four11 Web directory and arranged agreements with Compaq and Gateway 2000 to include the My Yahoo customized news service on new PCs.
Excite has already inked a lot of deals this summer - with online vendors such as Amazon.com, Barnes & Noble, and Preview Travel. As Excite signs new contracts, they are growing smaller in value: The 10 new partnerships average $2.5 million in value, compared with an average $9.2 million for the six deals earlier this summer.
