INTERACTIVE;AGENCY COMPENSATION ISSUE LOOMS LARGE

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Deciding what to charge for Web site construction isn't easy.

"It's a couple hundred [thousand dollars] to do a good site, and rarely are they retainer-based," one Internet veteran cautions.

A site like Levi Strauss & Co.'s (http://www.levi.com), which TN Technologies and Organic Online, San Francisco, worked together on, can cost well over $1 million.

But the agency's profit can be as small as 10% to 15% of that.

An ongoing project often is billed on a fee basis, starting with concept, design, beta testing and development. Later, maintenance and regularly scheduled content updates are factored in.

Hosting a site ranges from $5,000 to $10,000 per month; advanced services such as call center handling, measurement analysis and e-mail responsibility add $25,000 to $50,000 or more per month.

"I don't think there's money to be made on home pages," one agency executive says. The outlook, he adds, is better for agencies that can work the entire interactive mix, especially projects such as kiosks or CD-ROMs.

TNT's ability to sign up clients for such services is an important element of its impending initial public offering.

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