CNET Pays $14.5 Millionfor E-Comm Deal with AOL

High-tech news and information network, CNET has agreed to pay $14.5 million (US$) for the exclusive right to provide computer buying guides on America Online and CompuServe, for the next two and a half years. CNET will also initially be the exclusive provider of free-to-download software on AOL.COM. In addition, CNET’s technology news will be integrated throughout the AOL branded services.

The deal, which guarantees the payment of $14.5 million by CNET to AOL, plus additional payments once a certain revenue is reached, has been described by the companies as an “alliance.” As part of the alliance, CNET will create co-branded versions of its computer hardware and software buying guides. These buying guides will help technology shoppers to decide what to buy and where to get it.

The buying guides will offer reviews and recommendations, comparison shopping features and real-time pricing from a wide array of competing resellers. In addition, the buying guides will be individually customized to target various buyer “profiles,” like first-time buyers, families, students, small office/home office users, and women.

CNET and AOL also announced the development of AOL-related content on CNET television programming, and other video-based projects.

Beyond the News

This deal is especially important to CNET because it brings in an entirely new “mainstream” target market for the company’s e-commerce initiatives, whereas CNET’s existing user-base is generally regarded as a “techie” audience. In related news, AOL announced this week that its subscriber base has reached 16 million in following what was described by the company as its largest subscriber growth in a single month.

Deals like this have confirmed that AOL is the undisputed king of e-commerce destinations, with recent reports estimating $1 billion in e-commerce revenue from AOL members over this past holiday season. We’ve also been seeing a trend in which AOL’s “alliances” and “partnerships” always guarantee mega-payments to AOL. Oh, yes — that’s how the rich get richer

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