SilverCarrot Buys Milesource in Online Loyalty Market Consolidation

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SilverCarrot Inc., an online incentive and direct marketing firm, announced the purchase yesterday of Milesource, a free membership-based site with a consumer incentive system for loyalty marketing.


The deal is meant to strengthen SilverCarrot's online promotional marketing and incentive programs. Both New York companies did not disclose the sales price. Milesource retains its identity for the time being.


SilverCarrot claims to have compiled a database of 10 million consumers, generating 1 billion e-mail impressions a month on incentive programs executed for financial, travel and telecommunications companies.


Now, the three-year-old company -- which develops promotions that integrate into a client's site or as a standalone redemption center -- is looking to grow by acquisition. The Milesource purchase is the first step.


Launched in February 2000, Milesource rewarded members for visiting, joining and shopping at sponsors' sites. Since its debut, it has enrolled more than 1.5 million members who redeem their miles online.


Milesource has worked with companies like 1-800-Flowers.com, Wal-Mart Stores Inc., Dell Computer Corp., Eddie Bauer, JC Penney, Sephora, Best Buy Co., Staples Inc., Gap Inc. and Barnes & Noble.com Registered consumers can redeem award miles for more than 750 products and services.


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