Sites network to share revenue

Affiliate networks, which let Web sites get a piece of the revenue when their customers buy at another Internet storefront, are getting new attention this week with upgraded software and service offerings from two providers.

In an unannounced deal, Internet toy store eToys is expanding its reach by signing Be Free to build and maintain its affiliate network of Web sites that share in revenue from sales to visitors they send to eToys.

Separately, LinkShare today announced version 2.0 of its Synergy software that sites can buy to set up their own affiliate network or run through LinkShare's service bureau.

"It's an opportunity for retailers to pay for what they're looking for--sales," said Nicole Vanderbilt, e-commerce analyst at Jupiter Communications.

Merchants like affiliate programs because they only pay an affiliate when something is sold, unlike ad banners that are sold based on how many people see them or click on them. Web publishers like affiliate networks because they add a new source of revenue--commissions on sales.

Affiliate or associate networks were pioneered by online bookseller Amazon.com, which claims that 30,000 Web sites are selling books via Amazon.com by listing or recommending them.

Rival bookstore BarnesandNoble.com, which uses Be Free's service bureau, has about 2,500 affiliates. Bookstores are considered well-suited for affiliate networks because virtually any Web site can sell books to its target audience.

EToys, which had about 45 sites in its budding affiliate network, hopes to reach 300 to 1,000 sites through Be Free, eToy vice president Phil Polishook said. EToy's homegrown software couldn't scale to serve that many sites on its own. EToys is attempting to lure affiliates by offering them an aggressive 25 percent of sales. It is focusing largely on Web sites catering to parents or women.

"They're taking a huge burden off our shoulders so we can concentrate on marketing. It's a huge benefit to us," Polishook said. EToys considered LinkShare's offering but picked Be Free in part because LinkShare's customers include rival toy store FAO Schwarz.

Although their business models differ, both LinkShare and Be Free handle back-end details such as tracking sales and returns, calculating money owed to affiliates, and sending checks. Both offer tools that let affiliates monitor how much revenue they have earned as well as help them maximize sales.

Through its Be Free Affiliate Serving Technology, Be Free primarily offers and supports affiliate programs for individual sites, in addition to an ad-serving operation it also runs.

LinkShare has 80 merchants and 4,000 affiliates in its program, and it tries to connect affiliates with multiple merchants as well as give merchants access to all its affiliates.

In addition to bookstores, music sales sites such as CDnow and N2K's Music Boulevard have developed large associate programs. Be Free also runs networks for magazine subscription site Electronic Newsstand, art and framing store ArtUFrame, and media marketing firm Public Broadcast Marketing.