AOL builds up shopping sites

Coming on the heels of a robust earnings report yesterday that dazzled Wall Street, America Online today announced that it has signed on 40 merchants to further beef up its shopping services.

AOL will add the vendors to its shopping channel, and also will spread many of them across other platforms under its umbrella, including its Web portal, AOL.com, and its online subsidiary, CompuServe.

The deal also follows CompuServe's announcement Monday that it launched a shopping channel of its own, an indication that AOL may be injecting some life into a brand that otherwise has remained in limbo since AOL acquired it.

AOL's ability to ink this volume of partnerships underscores the online giant's success in selling advertising over a wide platform of properties, said Abhishek Gami, an analyst at William Blair.

In the past, AOL has emphasized that it plans to pursue a multibranded portal strategy in which companies can have their advertisements distributed over a number of properties in its network, including AOL's proprietary service, AOL.com, CompuServe, AOL's Instant Messenger service, and its recently acquired ICQ.

"When the technology is the same and customers are relatively the same, [AOL] can leverage merchants across that base," said Gami. "The heart of the issue is Internet advertising. A merchant or advertiser doesn't want to go to a million places to get their coverage."

Other Web companies also have incorporated this multibranded strategy. Lycos, for instance, now calls itself the "Lycos Network" after it acquired a number of properties throughout the year, including WhoWhere, Tripod, and Wired Digital (a deal that included Wired's accompanying HotBot Web search directory).

Microsoft recently folded its myriad Web properties under one MSN-branded umbrella. Formerly independent Web sites such as CarPoint, Sidewalk, Hotmail, and Expedia, among others, now carry the "MSN" moniker in their names. In addition, MSN today announced that it has inked a 5-year, $90 million advertising deal with credit card lender First USA.

Among the vendors AOL is adding through today's deal are mainstream retailers such as Bugle Boy, Macy's, and Toys 'R Us. The online giant will continue its existing relationships with other vendors such as Eddie Bauer, J. Crew, and Avon.