Xoom.com Adds FreeShop To Its Lineup

In a precursor to its integration into the NBC Internet conglomerate, Xoom.com, Inc. (Nasdaq: XMCM) announced a deal yesterday with FreeShop.com (Nasdaq: FSHP) to create a section on its site for FreeShop’s varied offerings.

Xoom.com, one of the Web’s top 10 properties with more than 10.4 million visitors, is slated to merge with CNET and NBC’s jointly owned portal Snap.com and several NBC Internet properties this month. Snap.com will be the flagship site after that merger is complete.

[email protected] debuted Thursday with a page on the Xoom site that is nearly identical to the FreeShop.com home page. While it carries the same special offers, trial products and free items as the original FreeShop.com site, the co-branded Xoom version also has buttons at the top of the page directing viewers to other Xoom.com services.

Hit and Revenue Generator

XOOM.com will get a portion of the revenue generated from the offers on [email protected]. To help drive these sales, Xoom.com plans to promote FreeShop on its home page, in other site categories and in its e-mail services.

[email protected] has 17 interest categories with thousands of free items. The new co-branded service’s unique content and “risk-free online shopping experience” will help Xoom.com continue to differentiate itself from other online portals, Vice President of Electronic Commerce Janine Popick said.

Freeshop.com is one of three Web properties in the Media Metrix top 10 primarily offering free items. Bluemountainarts.com, which provides customizable electronic greeting cards, ranks third behind Amazon.com and American Online’s shopping channel. The software download service on CNET, which is a player in the NBC Internet group, ranks sixth.

Adding Value for NBC

The partnership will ultimately add value to Xoom.com as NBC prepares to swallow it up. Xoom.com already offers some free goods and services, such as Web services, e-mail, shareware, clip art and streaming movies. FreeShop’s ability to add actual consumer goods, plus its wide Internet following, is expected to enhance Xoom.com’s Web commerce presence.

Xoom.com added auctions to its site last month, taking on the leader, eBay, and well-known properties Yahoo! Auctions and Amazon.com.

The company has followed a steady course of expanding its offerings since the NBC merger was announced last spring, prompting NBC to increase its investment in the company by $25 million (US$) in August. NBC’s total investment in the company is now $55 million, at an average price of about $57 per share.

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