Announcing its second Internet-related deal in three months, Fleet Financial Group said it plans to introduce a cobranded credit card with Go2Net Inc.
Fleet said it will pay the Seattle-based company up to $3.75 million to market the card on the Go2Net network of Web sites.
In October, Fleet signed a $22.5 million cobranding agreement with the Internet search engine company Lycos Inc.
"We believe there are significant opportunities to utilize the Internet both as a distribution channel and through partnerships within that channel, so we can distinguish ourselves from other issuers," said Joseph Saunders, chairman and chief executive officer of Fleet Credit Card Services in Horsham, Pa.
"Our marketing partnership with Go2Net reflects our ongoing commitment to grow, in part, through opportunistic partnerships," he said in an interview.
Starting in March, Fleet will offer applications for cards named for various Go2Net sites, including Silicon Investor, a financial discussion site; WebMarket, a price comparison service; and PlaySite, a multiplayer game site.
The cards will be free of annual fees. Fleet officials said the terms have not been decided.
Fleet credit card customers will be able to check their balances, request a credit line increase, and transfer funds on-line. Eventually, people will be able to apply for the card electronically. "We know that if we're going to be a player, if we're going to do more than pick up the crumbs left over by the pioneers, then we have to be involved with this," Mr. Saunders said.
The partnership is the latest in a flurry of Internet deals by card issuers, which are trying to realize long-held goals of using the Internet as a marketing vehicle.
Bank One Corp. has been especially aggressive. It recently said it would pay up to $125 million to advertise on the Excite Internet gateway, and its First USA credit card subsidiary committed $90 million for exclusive advertising rights on most of Microsoft Corp.'s network.
Scott Smith, an electronic commerce analyst at Current Analysis in Sterling, Va., said the deals may make sense despite the high price tags.
"Survey after survey shows that the frequent (Internet) user is a much more affluent demographic," he said. Through the Internet, "these banks can reach a better group of customers through a much cheaper means of marketing."
But because Internet marketing is so new, analysts said, credit card issuers are diving into untested waters.
"We're seeing huge search-engine deals," Mr. Smith said. There is some price inflation involved, he said, but it is too soon to gauge to what extent.
"It's still very difficult to understand what the return is going to be on these investments," Mr. Smith said. "The companies that are entering into these deals have very few pegs on which to hang real numbers."
Mr. Saunders said the value of Fleet's agreements is based on future performance.
"We are not just giving them anything," he said, referring to Lycos and Go2Net. "They've got to deliver something to us" to earn the full fees.