Snap.com and XOOM.com Acquire Stakes In BuyItNow.com

BuyItNow.com’s command was apparently Snap.com and XOOM.com’s wish, as the two popular Web sites announced Monday that they have entered into partnership agreements with the e-commerce retail site.

Snap.com, the Internet portal company from NBC television and CNET, will take a 3.6 percent stake in the company, in exchange for providing BuyItNow.com anchor tenancy placements in a co-branded gift shop and within a sub-area of the site’s “Home Shop.” The agreement also calls for related marketing and is valued at $10 million (US$).

Attracting nearly nine million unique users per month, Snap.com is scheduled to be integrated into NBC’s new Internet venture called NBC Internet (NBCi).

XOOM.com will take a 1.8 percent stake in BuyItNow in exchange for $5 million in marketing and promotion. XOOM, a free-service provider of home page building, chat rooms, message boards, clip art and online greeting cards, attracts nearly 8.5 million unique visitors monthly and was the 13th most visited Web site in May, according to Media Metrix.

“We are pleased and gratified that XOOM.com and Snap.com, two of the hottest companies in the e-commerce arena, have respectively joined our alliance to build BuyItNow.com into one of the best recognized e-tailers on the Web,” said Stephen Lehman, the company’s CEO.

Party of Five

The agreements bring the total of ownership stakes in BuyItNow to five. That might sound like too many chiefs and not enough Indians to traditionalists, but it’s not uncommon in the Internet industry, particularly with the rise of private equity placements.

BuyItNow’s majority owner is E4L, Inc. (NYSE: ETV), the direct response television company that is the primary producer of thousands of hours of infomercials each week. Reaching virtually every household in America, E4L became BuyItNow’s primary partner last month, taking a 48.7 percent stake in the formation of a joint venture with BuyItNow as the focus.

BuyItNow retained a 41.4 percent share, while media and billboard advertising company Clear Channel Communications took on a 4.5 percent stake. The company’s CEO said that BuyItNow was considering an IPO, but recognized that E4L could “turbocharge” the company and offers a unique source of brand awareness.

Unique indeed. E4L’s main product is like the family pet: It’s ubiquitous, often remains in the background, but makes itself heard loud and clear on occasion. It’s 3,000 hour weekly infomercials blanket the television airwaves and can also be heard on the broadcast.com site. The company says it leverages some $120 million in U.S. television media and $80 million in international media in promoting its products.