The agreement calls for EMusic.com and the ICQ, Spinner, and Winamp brands to cross-promote downloadable music products through reciprocal links, Web advertising, and other marketing initiatives. In addition, EMusic.com will develop cobranded sites with ICQ, Spinner, and Winamp for downloadable music.
AOL has been making moves in the online music market for some time now. As reported earlier, AOL in June jumped into the online music business with acquisitions of Net radio firm Spinner.com and music technology company Nullsoft, with stock-for-stock transactions valued at about $400 million.
AOL's moves are designed to give it a leg up in the online music market, which has seen tremendous activity of late. AOL has said it is planning to build custom branded music features for its proprietary service as well as for AOL.com, CompuServe, Netcenter, and ICQ. It also will add live events, Net radio, and music downloading to its services, the company said.
Under the nonexclusive, three-year agreement, EMusic.com will pay AOL a fixed marketing fee as well as a share of transaction revenues. AOL also will receive warrants in EMusic.com. From its collection of more than 20,000 songs, EMusic.com offers consumers albums for $8.99 or the ability to purchase individual tracks for 99 cents.
"The audience for digital downloads of music is growing exponentially," said Ted Leonsis, president of AOL Interactive Properties. "Just last week Media Metrix reported an estimated 400 percent increase in home users of digital music over the past year. Music is already enormously popular with the ICQ audience, and Spinner, Winamp, and EMusic.com will bring even more music offerings to this hip, tech-savvy group of people."