America Online, Sausage sign a software deal
afr.com.au
By John Davidson
Sausage Software has signed with America Online to supply software to its 17 million users.
The deal with the world's largest internet service and content provider, which company directors described as "the big one" and which could potentially represent millions of dollars in revenue for the Australian software firm, was signed in Melbourne yesterday morning, leading to a 11.5 per cent surge in the company's share price. Shares closed at $1.65, up 17¢.
It comes at a crucial time for Sausage, which was founded by the young software entrepreneur Mr Steve Outtrim in 1995 and has been fighting to turn itself around after posting a string of losses and languishing at a share price of around 20¢ for much of last year.
The deal follows a series of e-commerce-related deals with the likes of Intel, Telstra and, last week, St George Bank, which have seen the company's market capitalisation quadruple since January.
Under the terms of the AOL deal, Sausage will supply a customised version of its home-page creation software, HotDog Express, to AOL users, who can use it free-of-charge to build personal websites.
AOL Hometown, a part of the AOL internet portal site, provides free home pages to subscribers.
Mr Andrew Walsh, general manager of the Sausage Internet Tools division, said there was no dollar value affixed to the deal, which would revolve around the Sausage brand being heavily exposed on the AOL.com website.
However, Sausage did expect to make "significant revenues" from AOL users, who would be encouraged to visit the Sausage website and buy software.
Using a strategy common to many software companies, Sausage gives away the pared-down HotDog Express free on the internet in the hope of upgrading users to the full-blown version of the software, known as HotDog Professional, which sells for $US130.
But since HotDog Professional was too advanced for the sort of consumer attracted through the AOL deal, the company was working on a cheaper version - functionally half-way between the Express and Professional versions - that would be promoted to AOL customers, Mr Walsh said.
That software would go into beta testing in around a month, he said. A price for the consumer-focused version was not disclosed, and Sausage was still in negotiations with AOL about how this product would be promoted on the AOL web portal.
That extension of the agreement would depend on the success of yesterday's deal, Mr Walsh said.
AOL, through its subsidiary Netscape Communications, already has web-creation software, but HotDog would be exclusively promoted to Hometown users, Mr Walsh said.
In the first instance, the agreement between Sausage Software and AOL will extend only to the AOL.com site, which focuses on AOL's US-based users.
However, Sausage was negotiating with AOL International to extend the promotion to non-US users, including those in Australia, where AOL operates a joint venture with Bertelsman AG.
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