11/16 19:19 Electronic Newsstand becomes Yahoo magazine outlet
WASHINGTON, Nov 16 (Reuters) - Leading Internet media company Yahoo! Inc. <YHOO.O> and online magazine distributor Electronic Newsstand Inc. said on Monday that Yahoo had agreed to make Electronic Newsstand its premier magazine retailer. Electronic Newsstand's service offers discounted magazine subscriptions at the "guaranteed" lowest prices on the Internet through special deals reached with magazine publishers.
Yahoo visitors are directed to the enews.com site (www.enews.com), where they can choose to subscribe to a range of 500 name brand magazine titles in 25 subject areas.
The Yahoo deal gives Electronic Newsstand prominent placement on Yahoo in the form of of keyword searches Yahoo users might perform, said Brian Hecht, Electronic Newsstand's president and chief executive.
For example, Electronic Newsstand would appear when Yahoo users type in a search for the word "magazine" or for any of hundreds of specific magazine titles. In effect, Newsstand has been fully integrated into Yahoo's search system.
Specific financial terms of the deal were not disclosed.
But Hecht said the deal involved his company making an undisclosed payment to Yahoo in return for a portion of any potential future revenue stream, the standard terms for such electronic commerce partnerships.
The Yahoo deal extends Electronic Newsstand's growing reach on the Web.
Already the distributor is the exclusive magazine distributor for Lycos Inc. <LCOS.O>, another popular Internet media site. It also operates the magazine sales section of Barnes & Noble Inc.'s <BKS.N> barnesandnoble.com Web site.
In addition, the company has a fast-growing network of affiliate sites. That program, begun six months ago, has signed up more than 2,000 sites to feature a link to the enews site.
Privately held Electronic Newsstand was one of the first Web-based businesses when it was founded in 1993. The company does not disclose its financial results.
Its backers include New Republic publisher Martin Peretz and Madison Dearborn Capital Partners, a Chicago venture capital firm which invested $20 million in August.
Asked about the company's future financing plans Hecht hinted that Electronic Newsstand was contemplating an initial public offering of stock within the coming year.
"My primary goal is to grow a profitable company," Hecht said. "The trajectory that we're seeing is not unlike other companies that have gone public in the last year," he said.
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