Terms of the agreement were not disclosed. Under the deal, Internet services company iXL said it will work with Home Depot on its retail strategy for its Web site, homedepot.com.
Home Depot plans to begin selling home-improvement products online in the first half of next year. The Atlanta-based company and its competitors are turning to the Internet to sell their wares as a way to cut costs.
Home Depot's site now offers product advice and tools for builders to use--though it's planning to soon sell its entire catalog online.
Lara Hodgson, general manager of iXL's retail and consumer products group, said the company will help take Home Depot from a "brochure site" to a full-service site. Hodgson said competition to win the contract was stiff.
"They looked at everyone I could think of," she said.
iXL's stock was up nearly 6 percent this afternoon, closing at 36 a share.
Market research firm Jupiter Communications projects online home improvement sales will grow from less than $100 million this year to more than $700 million in 2000.
As the world's largest home improvement retailer, Home Depot expects to operate 1,900 stores by the end of the year 2003.
iXL's customers include SmithKline Beecham, FedEx and Discover Financial Services.