Internet-based direct marketing company Xoom.com Inc., San Francisco, anounced a multi-year deal on Dec. 15 with Internet software retailer BuyDirect.com to set up a co-branded online software store linked to the xoom.com site.
Part of a multi-faceted agreement that will let each company tap into the others' electronically assembled customer list, the store will offer Xoom members all the software sold on BuyDirect's main site with discounts offered through a buyer's club the companies are developing, said Jody Sherman, BuyDirect's vice president of business development. Details on the club have yet to be finalized.
A link to the co-branded version of the BuyDirect site will be featured on the navigation bar of Xoom's site, while banners and buttons designed to drive Xoom members to BuyDirect will be peppered throughout Xoom's pages. The companies set up a direct link between their sites this month, and BuyDirect anticipates setting up the co-branded store within the next few weeks. Targeted mailings touting a Xoom product are expected to be dropped to BuyDirect's customers early in the first quarter. Sherman would not disclose details of the offer.
Xoom generates traffic on its site and builds its membership base by giving away online services like e-mail, greeting cards and homepage construction. The company sends product pitches to its roughly 5 million members through e-mail. Many products — such as clip art software and utilities programs — are computer-related, though the firm sells gift items such as Beanie Baby toys and consumer electronics as well. About 70 percent of Xoom's revenue is generated through electronic commerce, with the balance generated through advertising.
The company's shares exploded on their first day of trading on the Nasdaq Stock Market Dec. 9, skyrocketing as high as 200 percent from their offering price of 14.
Because of the initial public offering, Xoom is in a quiet period until Jan. 3 and could not comment on specifics of the agreement. Privately-held BuyDirect, also of San Francisco, would not disclose financial terms.