Internet

Newsstand rents space on Lycos

The search engine strikes a three-year e-commerce deal with the Electronic Newsstand worth $10.5 million.

Lycos (LCOS) struck a three-year e-commerce deal today with the Electronic Newsstand that provides the search engine company with guaranteed payments of $10.5 million.

It is another example of a search engine or online service successfully renting out space on its Web site for advertising beyond a banner ad. Such deals are becoming commonplace among the likes of America Online, Yahoo, Excite, and many others.

Early on, Wall Street enthusiastically embraced such deals and bid up the stock price of these companies. Now, they're taken more in stride. Some analysts wonder how long these deals can be sustained, but there seems to be no shortage of them.

Lycos was trading down 3/8 to 37-1/2 in midday trading today.

In this deal, Lycos users will gain access to Electronic Newsstand's online ordering through the Lycos Shopping Network. Electronic Newsstand, which is privately held, sells discount magazine subscriptions directly to users.

"Partnerships like this, where we can serve online users based on particular interests, are extremely valuable for us," said Electronic Newsstand chief executive Brian Hecht. "This alliance also represents a strategic partnership key to our growth that goes far beyond banner advertising."