3Com Contract Boosts Netcentives

Netcentives, Inc. (Nasdaq: NCNT)gained 5/16 to 3 13/16 Thursday after the e-mail marketing company announceda contract with 3Com Corp. (Nasdaq: COMS).

Netcentives said 3Com will use its technology for a “large-scale, fullycustomized incentive system and e-mail communications program” for 3Com’s U.S.and Canadian partners. The new program is aimed at increasing sales byrewarding partners who do business with 3Com.

The Netcentives system will allow 3Com to manage the online rewards program,which gives points for product sales, training and event attendance. Pointscan be redeemed for frequent-flyer miles or for products showcased in anonline catalog to be provided by Netcentives. Netcentives technology will also bebehind an e-mail newsletter that 3Com will send to its partners.

West Shell III, Netcentives chairman and chiefexecutive officer, said that the combination of online rewards and e-mail communications is expected to leverage the value of 3Com’s channel partners.

Netcentives, headquartered in San Francisco, California, reported a 492percent rise in year-over-year revenue for the third quarter, to US$11.9million. The company lost $16.4 million, or 39 cents per share, beforeextraordinary items.

The company has agreements with America Online — which took a stake inNetcentives as part of its alliance — and Nortel Networks, among others. Netcentives provides technical consulting services, in addition to its rewards-management programs.

Netcentives went public in October 1999 at $12 per share. Since then, thestock has traded as high as 96 and as low as 3 1/4.

As of early trading Friday, 3Com was trading up 3/16 at 12 7/16.

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