After news this week that America Online would exclusively use Excite's search engine technology, Excite's stock has risen 62% to close at US$9.88 per share.
Under the terms of the agreement, Excite says it will buy AOL's existing search engine, WebCrawler, for roughly 2 million shares of Excite stock. That will bring AOL's stake in Excite from 12% to roughly 20%. AOL bought WebCrawler in June, 1995 for $1 million.
The deal will establish Excite as the primary search engine on AOL -- which has 7 million users -- and will give AOL the right to an unspecified amount of advertising revenue generated by Excite's search service, Excite officials say. While "AOL Search powered by Excite" will be the default search engine for AOL users, they will be able to use any search engine they choose once connected to the Internet, officials say.