Intel and Excite Announce New E-Commerce Deal

Intel (Nasdaq: INTC), the world’s leading computer chip manufacturer, is making a move to further solidify its expansion into the e-commerce arena through a new deal with Excite (Nasdaq: XCIT). The companies announced on Tuesday a multi-year agreement to jointly develop a new online shopping service that will reside on Excite’s popular Internet portal site.

Robert Manetta, a spokesman for Intel told the E-Commerce Times, “With this relationship, we are continuing to ‘connect the dots’ of Intel’s e-commerce strategy.”

The new deal will reportedly combine a vast selection of goods and services from Intel’s newly acquired iCat division with the e-commerce personlization technology of Excite’s MatchLogic division.

“This relationship forms the cornerstone of the next phase of our commerce strategy,” said George Bell, CEO of Excite, Inc.

According to Intel and Excite, commerce system architects from both companies will develop e-commerce technology for the first version of the Excite Shopping Service, to be launched later this year. It will be available to consumers through the Excite Shopping Channel at www.excite.com.

The Big Picture

The companies went to great lengths to emphasize repeatedly that the new service will provide shoppers with “an easy way for consumers to locate and purchase a very broad array of products and services that are tailored to their shopping interests.” Beyond the fluff, however, lies more significant news for two companies that are poised to become major players in the e-commerce industry, namely iCat and MatchLogic.

iCat, which was recently acquired by Intel, offers entry-level, turnkey e-commerce storefronts to Internet-based merchants, both as stand-alone software and as membership in its popular e-commerce mall. To varying degrees, it competes in the same market segment as Yahoo!Stores and iMall. The new deal, however, may position the iCat and Excite’s new online mall to start competing more effectively against e-commerce powerhouse AOL, which is still the undisputed king of online shopping destinations.

According to Robert Manetta, “Intel began its strategy in August ’98 with the formation of Pandesic, and the recent purchase of iCat. Now that we have the company, we are evolving it, extending it and creating value for it.”

MatchLogic, an independent subsidiary of Excite, produces software which allows large e-commerce sites to analyze the shopping patterns of each customer and to deliver targeted content based on the shopper’s individual preferences.

The Service

According the companies, the new service will feature offerings from major brand retailers among Excite’s merchant partners, as well as smaller boutique vendors from the more than 10,000 merchants in iCat’s current database. The service will also provide consumers with personalized product offers tailored to their specific interests.

For online merchants, being listed in the Excite Shopping Service directory will provide higher visibility and brand recognition, by reaching millions of consumers who may not find them through conventional browsing. The service will also enable merchants to conduct business with consumers directly on their own site, and merchants will be encouraged to build direct relationships with their customers.

Intel as an E-Commerce Force

Intel is, certainly, no lightweight when it comes to e-commerce operations. According to Manetta, Intel is selling just under a billion dollars (US$) of product per month online. “That accounts for nearly half our sales,” he said.

Robert Manetta explained to the E-Commerce Times that Intel is looking to e-commerce from two perspectives — as a source of indirect, as well as direct revenue.

“As e-commerce takes off, it creates an additional marketplace for computers, in general. We’re aiming at getting our chips into these computers as much as possible. Apart from that, Intel will also see direct revenue from our purchases of e-commerce companies like iCat.”