September 1, 2004 7:59 AM PDT

Apple to pay commissions on iTunes sales

Apple Computer announced Wednesday that it will offer commissions to third-party sites that drive customers to its iTunes online music store.

The Cupertino, Calif.-based company said that the iTunes Affiliate Program will allow Web sites to link directly to specific content stored in iTunes' digital archives, and will pay dividends to those companies that can help Apple generate downloads. The program mirrors Apple's efforts to attract student customers by offering free iTunes site licenses to colleges. The company has also tried to drive sales through volume discount programs.

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Company representatives cited the affiliate program as an opportunity to expand access to iTunes, as well as increase the exposure of the service through Apple's partners. The announcement indicates that Apple may be ready to take further steps into the realm of Web services by allowing individuals or companies doing volume business over iTunes to create links to its back-end operations. Web services technology allows developers to more easily link computers, software and networks through standard interfaces.

Apple did not immediately provide technical details about how the affiliate program will operate.

The announcement comes just one day before Microsoft is expected to launch its own digital music service, which may to provide iTunes with another formidable rival. People familiar with Microsoft's plans have predicted that the company's MSN Music song store will have Web-based components similar to iTunes but that it will also depend heavily on the company's Windows Media Player software.

Apple has previously acknowledged that despite iTunes' success in attracting large numbers of downloads, the operation has yet to become significantly profitable. Thus far the company has viewed the service as a marketing tool for its hardware products, specifically the iPod music player.


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