Circuit City will sell America Online's services in its stores and will get preferential placement on all AOL shopping portals under terms of a new strategic alliance announced by the two companies on Wednesday.
The deal, which will hit the marketplace this spring, follows last month's announcement of a comparable compact between RadioShack and Microsoft. Indeed, AOL had competed against Microsoft for Tandy's attentions, and was widely expected to seek out Circuit after losing its ISP bid.
The AOL announcement dovetailed with news that Kmart has teamed up with Yahoo! and Martha Stewart Living to offer free Internet access through a new e-commerce site, BlueLight.com. And, not one to be bested, Best Buy chairman Richard Schulze earlier this week indicated that the No. 1 consumer electronics retailer is in the final stages of negotiating a "broad-based, long range strategic alliance" that is believed to involve an ISP provider.
The Circuit-AOL pact calls for the nation's second-largest CE chain to offer AOL-subscription dial-up, DSL and satellite Internet access in dedicated sections of its stores, and to promote AOL and its services in its advertising and marketing campaigns.
In return, Circuit will become an anchor tenant in AOL's CompuServe, Netscape and AOL.com shopping portals.
Circuit chairman Richard Sharp said the strategic alliance "opens wide our capacity to help consumers integrate the vast power and promise of the Internet in a personal way." Added AOL president Bob Pittman, "We are confident that Circuit City's world-class sales organization will be a great asset . to consumers."
AOL is also rumored to be finalizing a separate Internet deal with Wal-Mart, the world's largest retailer, which pushed shares of both companies higher last week.
For previous TWICE Online coverage of this topic see.
Tandy, Microsoft Sign Five-Year ISP Agreement, 11-Nov-1999
TWICE's 25 E-Tailers To Watch This Fall, 07-Sep-1999
ISP Rebates Squash Summer PC Sales Slump, 09-Aug-1999
OfficeMax And CompuServe Team Up To Offer $400 Rebate Program, 14-Jul-1999
Jury Is Out On Free PC, ISP Promos, 09-Jul-1999
CEMA Sees E-Sales At $14B By 2002, 24-May-1999
Brick-&-Mortars Pursuing Their Own Internet Action, 12-Apr-1999
Service Providers May Hold Key To The Future's Product Sales, 05-Apr-1999