In a move primarily focused on getting brand recognition, the deal calls for AOL to receive guaranteed payments totaling a minimum of $42.5 million from Verio, and to also participate in future revenue sharing under the terms specified in the agreement. In exchange, Verio will receive significant online advertising and promotion of a cobranded Verio and AOL Web site that will offer a broad range of Verio Web-hosting products and e-commerce solutions.
Verio stock rocketed 21.54 percent or 7 points, to 39.5 in early trading. The stock has traded as high as 34.63 and as low as 13 during the past 52 weeks.
Verio said that among AOL's and CompuServe's combined 18 million members, more than 3 million members represent Verio's target market of small and medium-sized businesses.
"Cobranding with AOL will generate enormous exposure for Verio and dramatically heighten our visibility and Web-hosting volume," Verio president Herb Hribar said in a statement.
The marketing deal calls for the migration of nearly 7,000 AOL PrimeHost and CompuServe BusinessWeb hosting customers to Verio for continued Web-hosting service. The agreement includes providing hosting and e-commerce solutions for AOL, CompuServe, AOL.COM, and AOL's Digital City.
"This new partnership vastly expands Verio's brand name recognition throughout its target market," Verio chief executive Justin Jaschke said in a statement.
Web-site hosting services are increasing in demand as small to mid-sized businesses try to quickly and economically establish a global Web presence.