America Online, HomeGrocer ink marketing deal

The Internet service provider says HomeGrocer.com will pay it $60 million to promote the online supermarket on several of AOL's Web sites.

DULLES, Va.--Internet service provider America Online said closely held HomeGrocer.com will pay it $60 million to promote the online supermarket on several of AOL's Web sites.

Under the five-year agreement, AOL users in HomeGrocer's delivery areas will be able to reach the grocery service through the AOL.com, Netscape Netcenter, Digital City, AOL MovieFone and Oxygen.com Web sites.

HomeGrocer, based in Kirkland, Wash., delivers groceries in Seattle; Portland, Ore.; Orange County, Calif.; and Los Angeles. It plans to add eight to 10 U.S. markets in the next year, including New York City suburbs, southern Connecticut, Dallas and Atlanta. The company said last month that a planned initial public offering could raise as much as $264 million.

Shares of AOL, based in Dulles, Va., fell $1.31 to $49.94 in late trading. Before today, the stock was down 32 percent this year.

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