Netcentives to Part Ways with AltaVista, CMGI

As expected, portal-turned-search engine AltaVista said it will terminate its incentive marketing program, turning over its users to online loyalty and direct marketer Netcentives through terms of a deal announced Wednesday.

Beginning Thursday, San Francisco-based Netcentives will extend opt-in offers to the nearly 400,000 users of AltaVista’s rewards program to join its own incentives program, ClickRewards.

“We look forward to delivering AltaVista Rewards members quality earning and redemption opportunities through our successful ClickRewards program,” said Netcentives chairman and chief executive officer West Shell. “Our prospective members from AltaVista are just in time to take advantage of the many exciting holiday promotions which will be offered through our merchant network.”

Wednesday’s deal effectively concludes AltaVista’s relationship with Netcentives in addition to its seven month-old rewards program, for which the online marketer had handled back-end work. AltaVista had hoped that the program will draw customers to its several hundred e-commerce affiliates by offering points to visitors and shoppers. Users also earned points by researching and comparing products, and browsing merchandise departments.

In addition to ending the work Netcentives has done for AltaVista, Wednesday’s agreement also concluded its relationship with AltaVista’s parent company, CMGI, which also owns a $4.9 percent stake in Netcentives.

At the time of CMGI’s April equity investment in Netcentives, it was expected that the online marketer would develop points-based loyalty programs for many of the holding company’s then-70 sites. That plan now appears to have been scrapped, though Netcentives executives said the conclusion of its work with CMGI will not negatively impact its financial projections for next year.

The deal comes as AltaVista is sloughing off its ad-supported portal and its e-commerce services to refocus on being a consumer search engine. CMGI is also in the process of a major restructuring itself, preparing to cut several of its operating companies and prompting reorganizations in several more, including online marketing technology firm Engage and ad server AdForce.