Yahoo! Deals with Barnes & Noble

Yahoo leaps into the arms of Barnes & Noble.com, after its former bookselling partner, Amazon.com, aligned itself with America Online.

Under the terms of the deal announced Tuesday, Barnes & Noble.com, the online component of the country’s largest bookseller, will become the featured book retailer on the Yahoo directory.

As a result of the multimillion-dollar deal, Barnes & Noble.com banner ads or graphic links will appear on relevant search results pages. The site will also receive prominent placement on the front page of Yahoo Shopping and throughout its books-related sections.

Yahoo and Spinway, a provider of co-branded Internet access, also expanded their separate deal to include Barnes & Noble, agreeing to launch a promotion in which the chain’s nationwide stores will offer free, co-branded Internet access to customers.

Financial details of the deal were not specified.

“We are entering into a broad relationship which leverages the strengths of our combined online and offline assets and provides consumers with a trusted merchant integrated deeply throughout the network and our Yahoo Shopping platform,” said Yahoo president and chief operating officer Jeff Mallett.

“Working with Barnes & Noble.com and Barnes & Noble, Inc. displays our continued commitment to offering convenient, quality resources and services to our millions of users.”

The arrangement is expected to boost traffic to Barnes & Noble.com, which has historically lagged behind Amazon.com.

Through the deal, Barnes & Noble.com will occupy a place on Yahoo held previously by Amazon, which allowed its own three-year-old, featured-bookseller agreement with Yahoo to expire Tuesday, following a deal last month with AOL.

Amazon remains a featured Yahoo partner in several European markets.

Jupiter Communications analyst Marissa Gluck attributed the changes to market pressures.

“Both Amazon and Yahoo right now are struggling toward profitability,” she said. “Yahoo right now is trying to get as much revenue as possible from advertising. Amazon is trying to cut marketing costs as much as possible while still bringing in new customers.

Barnes & Noble.com’s stock popped on the news, up 31.51 percent to 6 at press time, following its previous close at 4.56. Amazon’s had slipped 4.23 percent to 41, off its previous close of 42.81.

The companies have declined to discuss their negotiations. But Gluck said that Amazon might likely be the winner following the players’ recent spate of deals.

“One thing that I trust with Amazon is that they are incredibly efficient and incredibly disciplined when it comes to their marketing dollars,” she said. “And if they’re turning away from a relationship, it’s simply because the relationship wasn’t working for them.

“If [Yahoo] were able to negotiate a similar contract with Barnes and Noble, then it’s really Barnes and Noble that’s the sucker here. If Yahoo wasn’t able to negotiate a contract that was similar to the dollar amount Amazon was paying — which was an incredibly high dollar amount several years ago — then certainly Yahoo is at the bottom of the heap.”

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