Microsoft inks $60 mil deal with search engines

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Microsoft Corp. signed a deal with four search services that together will pay $60 million to be listed on, giving a strong boost to the software giant's efforts to generate revenue around its revamped Web portal.

Compaq Computer Corp.'s AltaVista, Walt Disney Co.-backed Infoseek Corp., Lycos and CNET's NBC-backed Snap! are paying for placement in what amounts to a big but comparatively simple one-year deal for distribution on

"What we have done here is a very clean deal" involving only distribution, said MSN VP Laura Jennings.


The four search engines and a new MSN-branded search engine being launched in October will be rotated as the default search site on, with Microsoft guaranteeing the sites a number of impressions based on what each is paying. The sites are paying different undisclosed amounts in return for the placement.

"Being featured in front of consumers in a non-banner manner is an important part of the advertising mix," Ms. Jennings said. "It is a strong brand presence there, you are directly present at a time when a user is trying to perform a task."

The deals grew out of requests for proposals sent to all major search services. Noticeably absent from sites that have struck Microsoft deals are Yahoo! Corp., the biggest search service, and Excite.

Excite in May agreed to pay rival Netscape Communications Corp. $70 million in a complex two-year deal involving distribution, advertising and Excite's supplying of search technology.

Microsoft executives declined to say whether the company received proposals from Yahoo! or any other sites not part of the new deal.

The sponsorships, being announced today, come less than two weeks after Infoseek agreed to pay Microsoft's WebTV Networks a minimum $26 million over two years to be the exclusive search and directory offering on the WebTV service.


The latest sponsorship provides with a strong endorsement as Microsoft prepares to begin promoting the redesigned site to advertisers and consumers.

"In October, you'll start to see us turn up the volume a little bit," said Marty Taucher, Microsoft director of network communications strategies.

Anderson & Lembke, San Francisco, is developing the consumer campaign.


Microsoft President Steve Ballmer last month said Microsoft expects and its related network of sites to become a revenue contributor on the same scale as the company's multibillion-dollar mainstay software brands, Windows and Microsoft Office.

"It might take two years, four years, eight years, but it will be [that big] or we'll have screwed it up," Mr. Ballmer said.

Copyright September 1998, Crain Communications Inc.

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