America Online Gets Stylish

America Online (NYSE: AOL) is becoming a little more fashionable and a little richer.

Modacad Inc. (Nasdaq: MODA), which owns the fashion-related e-commerce site styleclick.com announced today that it has signed a two-year marketing agreement with AOL.

Styleclick.com bills itself as the first e-commerce site to provide image-by-image product comparisons by category. This service allows consumers to visually compare related products.

The Numbers

Modacad will pay AOL $7.5 million (US$) and also give AOL warrants to purchase 100,000 shares of Modacad stock. Shares of Modacad were up 1-7/16 to 13-5/16 in early trading today.

In return, AOL will promote styleclick.com — which features fashion, footwear, gift, and beauty products — in its shopping channel, entertainment and teen channels, home and garden WebCenter and its instant messenger service. AOL will be eligible for additional payments once certain levels of success have been met. AOL will also be able to sell advertising for styleclick.com, in exchange for revenue sharing with Modacad.

“Women are the fastest growing segment of consumers on the Internet today and account for 52 percent of AOL’s subscribers, or over 8.3 million users,” said Joyce Freedman, chairman and co-chief executive officer of Modacad. “Our strategy provides AOL and Modacad with a very effective vehicle to deliver highly qualified consumers to the affiliate shopping site.”

AOL Will Launch styleclick.com Area

Under the terms of the deal, a special styleclick.com shopping area will be launched on AOL. This store will feature apparel, accessories and cosmetics from companies such as adidas, Danskin, Easy Spirit, Nine West and Timberland.

In addition to the marketing agreement with AOL, Modacad announced that styleclick.com will also be promoted on new women’s network Oxygen Media, which is currently publishing a network of Web sites and also working to launch a cable channel.

Busy Day For Fashion Deals

Today was a busy day for e-commerce fashion companies. Modacad competitor fashionmall.com (Nasdaq: FASH), a vertical portal for fashion, signed an e-commerce distribution deal with Amazon.com (Nasdaq: AMZN).

Amazon.com will now be able market products sold by fashionmall.com to its customers. Product photographs and descriptions will be updated every two weeks and will include direct links to the relevant page on fashionmall.com.

Shares of fashionmall.com, which also operates the off-price outletmall.com site, climbed 13/16 to 7-27/32 in early trading today.

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