Lycos Inc. and CDnow today announced a three-year, $18.5 million agreement that the companies are billing as the most significant e-commerce deal signed by either party.
Financial terms of the exclusive agreement call for CDnow to pay $18.5 million to Lycos over a three-year period, including $16.5 million in cash and $2 million in stock.
Under the alliance, CDnow becomes the sole retailer of CDs and other music products on Lycos and the Lycos-owned Tripod network. Combined, Lycos and Tripod claim an audience of approximately 15 million unique monthly users.
Lycos said it will feature CDnow on its Shopping Network and Entertainment Web Guide, and as well as on music-related search results pages, banner ads, and keyword links.
The companies will team up to present music promotions on a quarterly basis on the Lycos site. CDnow features will also be incorporated into Lycos’ Personal Guide pages where users provide reviews of their favorite music.
“This agreement with CDnow represents a giant step forward for Lycos as Tripod was able to provide the level of member service integration not available through other navigation centers on the Web,” said Bob Davis, president and CEO of Lycos, in a statement.
“We’re pleased to provide our users all that CDnow, the leading online retailer of music, has to offer. In turn, Lycos will deliver an incredible amount of traffic to CDnow. Through Tripod, we are also building a virtual sales force for CDnow through our free home page building service in conjunction with CDnow’s Cosmic Credit Program.”
This latest Lycos deal caps off a round of five other business agreements made in March that the company said amounted to over $30 million in e-commerce, advertising, and sponsorship fees. Other companies securing alliances with Lycos last month included E-Loan, GetSmart, HomeShark, Preview Travel, and Realtor.com.
