Lycos, Barnes & Noble take on Amazon.com

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In the race to grab key e-commerce partners, Lycos made a strategic move last week, when it struck a three-year deal with BarnesandNoble.-com. The search engine company will promote the bookseller on its site and integrate books titles into search results, in exchange for fees and a share of the transaction revenue at the book site.

While BarnesandNoble.com and Lycos declined to disclose details, analysts estimate it's worth up to $15 million in revenue to Lycos over three years, on top of commissions on each book sale.

This comes on the heels of similar deals struck by Barnes & Noble's online competitor Amazon.com with America Online's Web site and its NetFind Search guide, as well as Excite and Yahoo!

"I think the biggest difference is that we've got an 800 lb. gorilla here," said Jan Horsfall, VP-marketing at Lycos, referring to Barnes & Noble's clout--over a thousand stores--compared to Amazon.com's Web-only presence.

A SUBSTANTIAL DEAL

This partnership is another blast in the fight between the book rivals. Alan Braverman, Internet analyst at Credit Suisse First Boston, believes Lycos brokered a substantial deal; he estimates it's getting 5% to 7% of all referred revenue, compared with a predicted 3% to 4% Barnes & Noble is giving AOL to be the preferred bookseller on its online service.

"Gaining market share and brand awareness now is critical," said Mr. Braverman, adding that while Lycos has trailed Yahoo! and Excite in traffic, he expects things to change. In its second quarter report, due this week, he predicts Lycos will show a profit; it would be the second search engine behind Yahoo! to do so.

Copyright August 1997, Crain Communications Inc.

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