More ISPs Build Partnerships for Profit

This week, Bluelight.com stepped closer to its parent company Kmart, while Juno made a referral deal with one of the largest residential mortgage providers in the world. It's all about making more money from existing infrastructure.

by Beth Cox and Ryan Naraine of internetnews.com [August 23, 2001]

Two ISPs this week announced e-commerce deals. The deals highlight the various ways in which ISPs are finding new revenue sources in a difficult climate.

Bluelight.com's deal will provide new storefronts for the parent company, Kmart. Juno's latest deal appears to be a pay-for-performance deal with a new vendor of services.

These deals show how some ISPs can make more money from existing infrastructure by partnering with vendors—getting more money from existing subscribers instead of spending money to expand.

Being a good sport
Bluelight.com signed a deal with Global Sports Inc. (NASDAQ:GSPT) to handle fulfillment, technology and customer service at its e-commerce site.

Kmart will select the merchandise to be sold on the site, own the inventory, and compensate Global Sports for its services through a combination of fixed fees and a percentage of sales.

In 1999, Global Sports developed an e-commerce platform that now operates 21 e-commerce sporting goods businesses for companies that include such high-profile names as The Sports Authority, The Athlete's Foot, and QVC.

Now, Global said, it has begun the second phase of its expansion strategy. In addition to the agreement with Kmart and Bluelight, Global Sports said it intends to pursue other opportunities outside of sporting goods, while continuing to grow its sporting goods business.

"Being selected by one of the largest retailers in the country as their e-commerce partner, after they conducted an extensive analysis of available options, is a great validation of our overall business," said Michael G. Rubin, chairman and CEO of Global.

Kmart (NYSE:KM) acquired Bluelight, its free Internet service provider (ISP) arm, in July, two months after the parent company ousted the top management and cut 38 members of the Bluelight staff to merge marketing and buyer functions.

The transition to Global Sports' fulfillment, technology and customer care resources is expected to be completed by the end of the third quarter of 2001.

Better a lender than a borrower be
Dial-up ISP Juno Online Services (NASDAQ:JWEB) and HomeSide Lending, Inc. on Tuesday announced a deal to market residential mortgage financing services from the Juno Web portal.

Juno said the deal makes HomeSide the exclusive provider of residential mortgages to its 3.3 million active subscribers.

Financial terms of the deal were not released although the two sides seemed to indicate that it is a straight marketing agreement for HomeSide to hawk its home-financing program to Juno's users.

HomeSide said it would offer a wide variety of mortgages and home equity lines of credit. HomeSide is hailed as one of the largest residential mortgage companies in the world, with a $190 billion mortgage-servicing portfolio.

Jacksonville, Florida-based HomeSide said its online mortgage technology allows a streamlined loan process, offering an approval decision in as little as 10 minutes.

New York-based Juno, which is six years old, provides multiple levels of service, including free basic Internet access, billable premium dial-up service, and high-speed broadband access in some markets.

Late-breaking news
In related news, Cogent Communications yesterday introduced a value-added services program that will offer security, hosting, storage, VoIP, e-mail, and video conferencing services to business clients.

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