Shares of Egreetings Network Inc. (Nasdaq: EGRT) shares soared Friday after the company said it will become the exclusive online card provider for Microsoft's MSN.
Terms of the deal were not disclosed, but officials expect the deal to boost Egreetings sales significantly. In the first quarter ending March 31, Egreetings reported sales of $2.8 million.
In early trading Friday, Egreetings was up 80 percent, or 1 7/8 to 4 1/4. The MSN deal comes at a good time for Egreetings -- shares were just above a 52-week low. Egreetings peaked at 16.
Under the MSN deal, Egreetings will be exclusive application service provider for MSN's online card services. Egreetings will build, host and manage the customized service on all MSN Web sites, which reach roughly 41 million visitors a month.
The agreement is Egreetings' largest licensing deal to date, the company said.
"The new licensing agreement also offers substantial revenue potential for Egreetings and Microsoft through advertising and e-commerce opportunities," the company said.
Egreetings went public in December priced at $10, but has had a tough time. In its most recent quarter, the company reported a net loss of $10.9 million, or 33 cents a share. Excluding charges, Egreetings lost 28 cents a share.
After the first quarter results, USB Piper Jaffray, an underwriter for the Egreetings IPO, downgraded the stock to a "buy" from a "strong buy."
Egreetings competes with Excite@Home's (Nasdaq: ATHM) Bluemountainarts.com, Hallmark and American Greetings' (NYSE: AM) AmericanGreetings.com, which postponed its IPO recently.