to Attach Gifts to E-Mail Greetings

[email protected] today is expected to begin generating a third revenue stream from Blue Mountain Arts, the e-greeting company it acquired a little more than a year ago. Through, [email protected] is launching a free service that enables users to attach gifts and gift certificates from such retailers as Martha Stewart Living Omnimedia and Walt Disney Co. to their electronic holiday cards.

When [email protected] purchased Blue Mountain Arts in October 1999 for $780 million in cash and stock, it said it planned to eventually generate money through the e-greeting site. “[email protected] plans to leverage the audience reach and page views almost immediately to create more [email protected] registered users, broadband subscribers and, ultimately, revenues,” the company said in a statement about the acquisition.

While there is nothing unusual about a company wanting its acquisitions to generate revenues, it is well-known that capitalism was the furthest thing from the minds of Stephen Schutz and Susan Polis Schutz, founders of Blue Mountain Arts, Boulder, CO, when it debuted with free e-greeting cards in 1996.

Jared Schutz, who before the sale was executive director of Blue Mountain Arts and is Stephen and Susan's son, was instrumental in selling the company to [email protected] His parents also are well-known for staying out of the spotlight and avoiding the press.

Neither Jared nor his parents have had any involvement with since the sale, according to an [email protected] spokeswoman.

The site attracted 12.8 million unique visitors in October, according to Media Metrix. delivers 1 million electronic cards per day and is expected to send more than 100 million holiday cards this month. Between 40 million and 50 million Christmas and Hanukkah cards are sent this time of year.

Now the site will generate ad revenue from its retail partners. With the addition of the new gift attachment service, has three revenue channels: advertising, sponsorships/partnerships and e-commerce.

[email protected] said users of its gift attachment service can choose from thousands of greeting cards on its site and create a personalized holiday message, then select and purchase a gift to attach to the message. The greeting card and gift notification is delivered to the recipient through e-mail, which contains a link to information about the gift they will receive, [email protected] said.

To access the service, users click on the Gift Center tab at the top of the site. They can choose to attach to their holiday cards gift certificates or gifts from such retailers as Harry and David, Disney, Martha Stewart, Mrs. Fields, Timex or Dan's Chocolates.

“Cards and gifts are naturally delivered together to express sentiments,” said Mark Rinella, vice president and general manager at Blue Mountain Arts. “ translates card and gift-giving to the Internet, enabling us to better maintain and manage our personal relationships with family and friends any time of the year for any occasion.”

Rinella said that had been receiving a lot of requests from customers to send gifts along with their holiday cards. Although other sites allow users to send cards and gifts, he said, none have fully integrated the two services.

“The trick for us was to combine the two,” he said. “We tried to keep it as simple as just sending a card from our site.”

The company will promote this new service using an e-mail marketing campaign to opt in users, advertising in national publications such as USA Weekend, People and Parade and an aggressive public relations push.

“Excite is doing a very large campaign called 'Instant Giftification' to promote the service,” Rinella said.

According to home decorating guru Martha Stewart, CEO of Martha Stewart Living Omnimedia, New York, it's the “attention to detail” that sets the service apart and makes “gift-giving special.”

“We let people start with a touching, personal message from Blue Mountain, then add the finishing touch with a gift from my collection of gift attachments, including finely detailed ornaments and holiday baking kits, all bound to please friends and family,” Stewart said in a statement.

Rinella noted that all transactions are conducted by the retailers on their own Web sites. The retailers have set up “boutique” pages that offer their top merchandise to users. Their entire catalog can be accessed as well.

He also said Blue Mountain's retail partners offer a variety of choices.

“It's pretty cool,” he said. “Mrs. Fields has so many choices. Even if you pick brownies, you have choices. Do you want just nuts? Do you want chocolate chips? And Martha Stewart set up her top 25 products as a suggestion.”

He said the company plans to announce new retail partners within the next two months, including an apparel retailer and book and CD retailers.

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