The high-stakes race to sign strategic agreements with heavily trafficked Web sites continues: Barnesandnoble.com has announced a multimillion-dollar deal with the Microsoft Network to be the exclusive English-language bookseller on MSN.com and its global network of portal Web sites.
The new deal is the latest in a series of agreements by the major online booksellers aimed at channeling the millions of consumers who visit sites such as MSN.com toward their online storefronts. Ben Boyd, a spokesperson for B&N.com, told PW the deal is "multimillion-dollar and multiyear."
Boyd told PW that the agreement will place a B&N.com "buy books" button on the MSN.com site (or channel, as MSN calls its sites), as well as on its travel site Expedia, the MSN shopping site and its small-business site. B&N.com will also work with MSN's WebTV Network (with about half a million subscribers) to create book-retailing opportunities. The agreement also makes B&N.com the exclusive English-language retailer on MSN's network of foreign-language sites.
Boyd declined to provide specifics about the deal, but Internet analysts estimated that B&N will pay $10 million to $20 million a year for access to the millions of visitors to MSN.com. Generally, these agreements provide for a payment for advertising, as well as a transaction fee for each purchase or a percentage of sales made. Boyd emphasized that "this is not necessarily advertising. It is content integration. Our link will provide information on books based on where you are on the MSN channels." B&N.com also has exclusive bookselling agreements with AOL (15 million subscribers, $40 million for four years) and search engine portals InfoSpace and Lycos.
Portal Web Sites
Portal Web sites such as Yahoo!, AOL. com and MSN.com are Web brand names that have been designed to attract millions of Web visitors with an array of services, information and electronic commerce. Over the last two years, Microsoft Network has been transformed from a poorly subscribed online service in the shadow of AOL to a completely Web-based portal site offering "channels" of information, entertainment and cybercommerce opportunities. MSN.com attracted about nine million visitors in October (third highest), according to Net Ratings, a Milpitas, Calif., firm that rates Web traffic.
Of course, Amazon.com, the leading online bookseller, has similar multimillion-dollar deals with some of the heaviest trafficked sites (among them Yahoo! and Excite), including an agreement with AOL.com, the number-one ranked site for Web traffic, with more than 21 million visitors in October. In fact, Amazon.com also has a presence on MSN.com; Amazon signed a deal last month to be the exclusive music retailer on MSN.com.
Nevertheless, the deal is seen as an effort by B&N.com to close the considerable sales gap between itself and Amazon.com, which has been estimated to have about 80% of the online book retailing business. Ken Cassar, an analyst at Jupiter Communications, an online market research firm in New York, said the deal gives B&N. com "significant reach. But this isn't a zero-sum game. The market is growing so quickly that B&N's gain isn't necessarily Amazon's loss."
