Streaming media player Broadcast.com on Tuesday announced a contract with Amazon.com that gives the online retailer the right to be the exclusive music and book seller on Broadcast.com's Web site.
Despite the deal, first reported by CBS.MarketWatch.com, shares of both Broadcast.com (BCST) and Amazon.com (AMZN) fell Tuesday amid a second-day drubbing for most Internet stocks.The deal will integrate Broadcast.com's multimedia content with links to relevant books and CDs available on Amazon.com's Web site. Amazon.com, which also announced a similar distribution deal with Hoover's on Tuesday, will also advertise on Broadcast.com's site, the companies announced in a press release.
"Our relationship with Amazon.com enhances the broadcast.com experience by enabling our users to purchase books and music related to their listening or viewing selections," said Broadcast.com CEO Todd Wagner. "We're pleased to be working with Amazon.com to maximize sales of books and music from our site."
Financial terms of the deal were not disclosed, but a source familiar with the contract said Broadcast.com will receive a guaranteed payment from Amazon and a percentage of all goods sold.
In October, Broadcast.com signed a similar deal with First USA, giving the giant credit card issuer the exclusive right to market its product to Broadcast.com users.
"Hosting e-commerce portal links is an important source of revenue for these online media companies," said Vernon Keenan, president of San Francisco-based market research firm KeenanVision.
Broadcast.com's Web site gets about 520,000 unique users per day, and includes live broadcasts for about 370 radio stations, 30 TV stations, and more than 420 college and professional sports teams, according to the company's press releases.
The company also provides multimedia streaming services for corporate events, such as stockholder meetings or conference calls. Earlier this month, the company bought Web site host Simpleet for about $20.8 million in stock to offer consumers and small business the ability to do their own multimedia broadcasts.
Broadcast.com went public in July at $18 a share, rising as high as 74 on what was then a record first day of trading for a new issue (The record was eclipsed earlier this month by Theglobe.com's 606-percent first-day rise).
The stock re-hit that first-day high for the first time last week. As recently as two weeks ago, the stock was trading at 48. In September and October, Broadcast.com President Mark Cuban had been accumulating shares of his company, Securities & Exchange Commission filings showed. "I can't be any more excited about our business," Cuban said previously.
Written By Darren Chervitz