BT boosts ecommerce drive with £10m Excite investment

BT has bought a 50 per cent stake in the UK arm of Internet portal Excite for $10m. As part of the deal, Excite UK will also launch its own branded version of BT Click - a pay-as-you-surf Internet access service, to be called Excite Click.

The UK telco said the deal puts weight behind its drive into the ecommerce arena, giving it, among other things, an ideal advertising tool. John Swingewood, BT Internet and multimedia director, said: "Subscriptions are currently the largest revenue area, but that will in future give way to advertising and transaction based ecommerce."

But Michael Walton, CEO of Internet consultancy NVision, believes the deal emphasises BT's incoherent Internet strategy. "It's good that a big company like BT is investing in the UK market and validating it. However, $10m is small change for BT, so it has nothing to loose. It needs to get in the Internet sector and is having a play at everything to see what works."

Excite vice president Richard Redding said the deal is "a great way to extend our brand". He added that the company is looking at other ways to extend the brand to the rest of Europe, but that no decisions have yet been made as to which partners will be involved.

In early November, BT announced a similar branding agreement for its Internet access service with search engine Yahoo. But Swingewood insisted the Excite deal will not conflict with Yahoo's. "The Yahoo deal was a distribution deal, this is an investment into a portal service," he said.