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AOL, Nikolai.com Ink Branding Deal

In its move to expand its already considerable presence on the Web, America Online Inc. Monday agreed to lease leading children's e-commerce company Nikolai.com Inc. space across a variety of its brands for the next three years.

Nikolai.com Inc.'s online properties, including Nikolai.com, a children's entertainment site, and toyboutique.com, an online toy store, will be available across several AOL (AOL) brands, including AOL, AOL Canada, Netscape Netcenter and AOL's Shop@AOL online shopping destinations on AOL, AOL.COM, CompuServe and Netscape Netcenter.

Financial terms were not disclosed Monday.

Nikolai.com will receive prominent placement as an anchor tenant in the games area of AOL's Kids Only Channel and will be accessible at AOL keywords: Nikolai or Neow-Neow. Nikolai.com, already a tenant on Netscape's Netcenter, will also receive enhanced placement in the form of a permanent branded button and permanent text links in Netcenter's Kidzone.

Toyboutique.com will be an e-commerce partner in the Educational Toys area of the Shop@AOL online shopping destinations on AOL, AOL.COM, CompuServe and Netscape Netcenter, and during holiday season, it will also be included in AOL's Kids Shopping Catalogue.

Also, toyboutique.com will have a prominent branded button in the Computing, Kids and Toys departments within the Shopping Channel on AOL Canada, as well as promotional opportunities.

"Our alliance with AOL is significant to the rapid growth of Nikolai.com Inc. for two strategic reasons," said Isabel Hoffmann, President and CEO, Nikolai.com Inc.

"More families will have the opportunity to access us directly, to take part in the Nikolai.com community and to experience the convenience of our online store, toyboutique.com. Secondly, AOL's recognition of Nikolai.com Inc. as one of the leading purveyors of innovative children's online content, furthers our mission of being the Internet destination of choice for kids and families."

Nikolai.com Inc. is a children's Internet and e-commerce company that has gained high brand recognition for its original characters and become a leading vertical portal for kids and families.

AOL's pairing with Nikolai.com is the latest in a number of alliances the online behemoth has created in the past few years. In November, AOL forged a three-year deal with Blockbuster Inc., which tapped Blockbuster as the No. 1 home video supplier on AOL's entertainment channel. AOL paid the video powerhouse $30 million for the development of broadband and delivery for both companies.