*1-800-Flowers Comes Out Smelling Like a Rose in AOL Deal

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1-800-Flowers said Friday in a prepared statement that it has renegotiated its marketing deal with America Online. Under the deal, 1-800-Flowers will pay AOL $22.1 million over the next five years to be the exclusive retailer on the service provider's network of sites. The previously required 1-800-Flowers pay $42 million for a four-year marketing deal.


"This is a sign that 1-800-Flowers.com has some leverage here and is flexing its muscle," said Kristine Koerber, a senior analyst at WR Hambrecht.


"Given what's going on in the dot-com market, 1-800-Flowers.com is a good partner because it has a viable business model, good management and a strong brand name," she said. "They're not going out of business like other retailers."


Other analysts say that the deal is confirmation that 1-800-Flowers will reign the online flower market, as it is currently negotiating deals with other Web portals as well.


As part of the deal 1-800-Flowers will promote AOL on its Web site. The deal will go into effect Oct. 1.
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