The $60 million agreement makes Homegrocer.com a prime Wed destination for more than 21 million American Online (AOL) and CompuServe members. The five-year strategic alliance includes promotions at AOL.COM, Netscape Netcenter, Digital City and other AOL Web entities.

Jon Landers, HomeGrocer.com senior vice president of marketing and sales, said the deal combines the best of personalized home-delivery services and new technologies.

"HomeGrocer.com was founded on the belief that online technology, combined with old-fashioned home delivery, can offer busy consumers a more convenient way to shop," Landers said.

Bob Pittman, AOL president and chief operating officer, said the two companies share in the belief that online technology should bring real value to people's everyday lives.

"Bringing this service to our brands will allow people to easily shop for groceries and have them delivered right to their doors, saving time and making one of the things they do every day more convenient than ever," Pittman said.

HomeGrocer.com currently operates five customer fulfillment centers in Washington, Oregon and California. The firm intends to add distribution centers to ten markets in Texas, Georgia, Connecticut, New York and Washington D.C. by the end of the year.