October 28, 1998 4:20 PM PST

Microsoft inks $90 million ad deal

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In what many have labeled the heftiest advertising deal ever on the Internet, Microsoft today signed on credit card lender First USA for a five-year, $90 million advertising agreement.

The agreement gives First USA, a unit of Bank One and the largest lender of Visa and MasterCards in the United States, exclusive rights to advertise its credit cards across Microsoft's MSN.com Web portal network.

MSN.com executives have touted the deal as a clear sign that advertisers are warming up to the idea of spending millions to reach the collection of sites under MSN's roof.

"I don't think we could've done this deal six to 12 months ago because MSN.com wasn't the network that it is today," said Kim Poplawski, MSN's group manager, marketing.

This summer, MSN announced that it would fold all of its Web properties into a network joined by the common MSN moniker. As a result, formerly independent entities like Expedia, CarPoint, Hotmail, and Sidewalk all have been renamed with an "MSN" prefix.

The purpose of the marketing initiative was to unify Microsoft's sites with a similar look and feel, and to provide advertisers with the ability to sell packages across many properties. In addition, many of the sites point to Web addresses that can be counted under MSN's metrics for audience measurement purposes. This, in turn, allows MSN to show greater daily hits and page views to present to potential advertisers.

"With the relaunch, vertical properties are more closely tied with a common user interface," Poplawski said." We previously had strong individual sites without any ties holding them together."

Analysts said Microsoft's decision to consolidate its Web sites under MSN could already be paying off.

"It's not a change in Microsoft's traffic or reach, but a change in Microsoft internally to monetize its traffic when they were more fragmented," said Abhishek Gami, an analyst at William Blair.

The reach of the MSN network among all online users has increased from 30.1 percent to 34.1 percent during the past month, according to Media Metrix, one of the largest Web-metering companies.

First USA has 60.5 million card members and $65.2 billion in managed loans.

Reuters contributed to this report.

 

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