CDnow signs three-year, $18.5 mil deal with Lycos

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Music retailer CDnow will become the exclusive music retailer of CDs and music-related products on Lycos and its subsidiary Tripod. CDnow will pay Lycos $18.5 million - $16.5 million in cash and $2 million in stock over the term of the agreement. In exchange, CDnow will be featured on Lycos' Shopping Network and Entertainment Web Guide, and will show up in music-related search results. Counting the CDnow deal, Lycos reported that it had signed $30 million worth of advertising agreements in the last month. Other distribution agreements include E-Loan, GetSmart, HomeShark, Preview Travel and Realtor.com.

For Tripod, the deal sets up an affiliate program, in which Tripod members are encouraged to link to CDnow. If someone visits CDnow and buys merchandise via a Tripod member's page, the page owner will receive merchandise credit toward their next purchase on CDnow.

Copyright April 1998, Crain Communications Inc.

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