Bank One Corp.'s First USA credit card division is strengthening its Internet marketing in a deal with the popular shopping site

First USA said it wants to increase the buying power of consumers bidding on airline tickets, hotel rooms, cars, and mortgages through the Priceline service. A First USA credit card can be used or applied for on- line to complete the transaction.

Capital One Financial Corp. recently ended a similar agreement with Priceline, industry sources said. That agreement had Capital One adding $50 to a shopper's bid when that person applied for its credit card. The Falls Church, Va., issuer will still work with Priceline on other marketing deals.

Under First USA's pricing structure, a customer offering $200 for an airline ticket could have $40 from First USA instantly added to the purchase offer if he applies for or uses a First USA credit card in the transaction.

The agreement is to run for five years. Priceline could earn up to $200 million if certain performance thresholds are met, the companies said.

Priceline would also offer other promotions linked to First USA's customer-acquisition and loyalty programs.

"The concept of moving beyond on-line advertising and promotions into becoming an integral part of on-line e-commerce transactions and immediately benefiting the customer is groundbreaking," said James W. Stewart, executive vice president of partnership and Internet marketing at First USA in Wilmington, Del.

" will enable First USA to extend its leadership position in next-generation credit card marketing," Mr. Stewart said.

First USA has been aggressively pursuing an Internet presence. In the past year it has signed exclusive marketing deals with major portals like America Online Inc., Excite Inc., Yahoo Inc., and Microsoft Network. It also has made inroads through individual sites like that of on-line music retailer CDnow Inc.

Analysts said the alliance with Priceline is a new approach.

It is "interesting because it is focused on stimulating card usage, which is more important" than new-card acquisition, said David S. Berry, director of research at Keefe, Bruyette & Woods Inc. in New York.

Stamford, Conn.-based Priceline calls its service an "on-line, buyer- driven, commerce system." It requires all bidders to secure their offers with a credit card, making it an ideal avenue for First USA to promote use of its card, according to Priceline. Customers can bid using any credit card, but First USA has exclusive rights to the incentive.

James Marks, managing director at Deutsche Bank Securities in New York, said First USA is "shifting a tremendous amount of (marketing) resources away from direct mail toward the Internet."

He sees First USA's Internet approach as risky but says it is necessary for financial services companies in general.

"The risk of not doing anything (on the Internet) is greater than the risk of negative returns," Mr. Marks said.

Mr. Berry said many Internet card marketers have shied away from conventional banner advertising because they see such ads as more beneficial to the Web site companies. They compare this to a "real estate business where the renter gets the most out of it," he said.

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