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AOL, Software.net in deal

As part of the three-year agreement, Software.net will become an exclusive reseller of downloadable software on AOL's Web site and proprietary service.

America Online (AOL) and online software superstore Software.net announced a deal today under which Software.net will become an exclusive reseller of downloadable software on AOL's Web site and proprietary service.

America Online, the leading online service with more than 11 AOL makes online waves million members, has formed many alliances in the last year, ostensibly to offer users more value but also as an additional revenue stream. Most recently, AOL ramped up its financial services offerings through deals with Standard & Poor's and Bloomberg.

AOL faces stiff competition for loyal eyeballs from the likes of Web-based search engines-cum-content sites such as Yahoo and Excite as well as Web-based online services such as Snap (published by CNET: The Computer Network, which runs NEWS.COM). The online giant announced last month it would be raising its monthly charges from the industry standard $19.95 per month to $21.95 per month, as of the April billing cycle.

As part of the three-year agreement with Software.net, AOL will receive $21 million in guaranteed payments and also will share in advertising revenues after a specified threshold has been met. AOL Investments will make a minority investment of as much as $2 million in Software.net.

Software.net will get a combination of exclusive and semi-exclusive positions on an assortment of computing and commerce areas within AOL. The online software store will be featured in areas of AOL that handle tax preparation, software downloads, computing, personal finance, games, and file search on AOL.com.

AOL members will be able to choose a software package, and Software.net will give instructions on downloading it to their hard drives and easily installing it for use. Next-day delivery of traditional "boxed" software, for those who prefer installing it from a disk, also is available.