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February 3, 1999

OPEN MARKET WINS SHARE OF LYCOS E-COMMERCE REVENUES

By CBR Staff Writer

Open Market Inc, the e-commerce software company got a big shot in the arm yesterday from a revenue-sharing agreement with Lycos Inc. Within a few months, any deal done through Lycos’ online store gets resolved using Open Market’s Transact processing software and gives the company a small percentage of the revenues from each transaction. In addition to the installation of Transact at Lycos’ back-end, the portal will promote Open Market’s ShopSite site-building software to offer merchants the opportunity to create a self-branded web site and host it at the Lycos store. It is effectively taking ShopSite on an OEM basis as it will be Lycos-branded software, however, OM will get a share of all transactions, whether they come through a site built using ShopSite or not. Currently the Lycos store merchants have to make do with a typical co-branded shopping portal, which it launched last quarter having started its e-commerce efforts 18 months ago. The deal is non-exclusive between the two Massachusetts neighbors but it is a pretty deep relationship, says Geoff Bennett, Lycos VP electronic commerce. We understand that the systems will be up and running within about three months, though Lycos would not put an exact time frame on it. Lycos claims to have some 20 million registered users across its properties, which have joined its network through its various acquisitions, including Wired Digital, Tripod and AngelFire. In addition, all merchants that have built a store using OM’s ShopSite through their ISP or web hosting companies will be added to the Lycos store. Lycos will be charging for ShopSite, and while there are no prices yet, we understand that the company will be offering different pricing layers depending on the size of the store and the features merchants want to include. OM sells ShopSite, which it got through its May 1998 acquisition of ICentral Inc (05/04/98) exclusively through ISPs and hosting firms and is aimed primarily at small business. OM’s high-end commerce and catalog product Live Commerce recently went to version 2.0 and is now available on Windows NT and Sun Solaris. Open Market’s fortunes have fluctuated a lot over the past year. One of the original internet commerce software companies, it has seen its share price fall from a high of just over $29 in May last year to $4.25 by October, but they rose sharply in November and have been generally rising since then. The company began offering LiveCommerce and Transact in a modular format, lowering the initial price point and offering additional products and services in phases. That move cut LiveCommerce’s base price to $45,000 and Transact’s for digital goods to $65,000 and subscriptions to $80,000, from $125,000 previously. Open Market’s shares closed up $3.75, or 23.7% at $16.9375.

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