Cdnow in $22 million MTV deal
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By Frank Barnako, CBS MarketWatch Wed May 20 11:06:13 1998
CDnow Inc. (CDNW) and MTV Networks have agreed to a three-year marketing and advertising agreement. As part of the deal worth $22 million in cash and CDnow stock, the company will be the exclusive online music retailer of the 1998 MTV Video Music Awards, while also sponsoring other MTV and VH1 telecasts. MTV and VH1 online stores will be built by CDnow. The retailer will feature MTV and VH1 reviews and music news, and a "Now Playing" ticker highlighting programming on the two TV channels in real time. "VH1 and MTV are the only brands that have the true horsepower to move consumers from their televisions to their computers," said CDnow founder Jason Olim. "That's what marketing convergence is all about.''
Negroponte: e-commerce may eliminate folding money
Technology guru Nicholas Negroponte hasn't lost his enthusiasm for things digital. Speaking at an Oracle Corp. (ORCL) users' meeting in San Diego, the director of the Medial Lab at MIT predicted online commerce may reach $1 trillion by the year 2000. The United States Commerce department estimates the value of e-commerce-facilitated goods and services will be a third of that by 2002. Negroponte characterized e-commerce as a gathering tidal wave, but conceded consumers have yet to become comfortable with the security issues and payment systems, InfoWorld Electric's report of his speech said. He predicted consumer behavior could well change, making grocery shopping online commonplace, and that a micro-transaction market for publishers may open, permitting the sale ofl articles for as little as a few cents.
MindSpring halts some sign-ups
Top-rated for consumer service, Internet access company MindSpring (MSPG) says it has waiting lists in six areas of the country where it will not sign on new accounts. In a notice on his Web site, prospective customers in marketrs including Valley Forge, Pa., Malibu, Calif. and Lubbock, Texas are told, "We rely on third party network providers in some areas, and if they are unable to build their telephone network out quickly enough, we stop adding new members in those cities until they can catch up. This measure protects the service levels for our current members by not overloading the network." In a move to expand its services to customers, MindSpring announced it's adding headlines from The New York Times to its Web site. Readers can get full text of the articles from The Times' servers by clicking on the headlines. MindSpring offers other content on its page including news and articles from Time magazine.
Pay-model search site attracts investment
GoTo.com, the search engine that allows Web sites to purchase placement, has completed its first round of financing. The company said investors including venture capital firm Draper Fisher Jurvetson and idealab! Capital Partners contributed "iexcess of six million dollars." GoTo's model is similar to a Yellow Pages directory, in which advertisers are accordingly charged for more prominent placement and greater exposure. With GoTo, advertisers pay only for actual visits to their sites. "GoTo's model greatly expands the supply of targeted and cost-effective marketing opportunities for e-commerce sites," said Timothy C. Draper, founder and managing director, Draper Fisher Jurvetson.
Used vehicle auctioneer launches site
Online used car classified site AutoConnect.com (www.autoconnect.com) launched on the Web this week with a partnership making it a feature of the 17 city Web sites managed by Cox Interactive Media. Similar agreements are in place with Yahoo! Inc. (YHOO), Lycos Inc. (LCOS), and WebCrawler. AutoConnect offers classified advertising services free of charge to the buyer and the car seller. AutoConnect is owned by Manheim Auctions Inc. and the Dealer Services Group of Automatic Data Processing, Inc. Manheim is a national operator of dealer auctions for used vehicles.
Frank Barnako writes and broadcasts for CBS MarketWatch.