NEW YORK (CNNfn) -- America Online, the world's largest Internet service provider, announced on Monday it will make Excite Inc. its exclusive search and directory service.
The companies said they would explore ways to better integrate "smart search" capabilities to allow AOL's seven million subscribers to search through the company's proprietary content.
This will make Excite's search engine the largest on the Internet, surpassing Yahoo!
George Bell, CEO of Excite, said on CNNfn's "It's Only Money" that his company would also be acquiring AOL's WebCrawler search engine.
The cost of acquiring WebCrawler would be about two million shares of Excite, which raises AOL's ownership of Excite to about 20 percent from the current 10 percent.
Wall Street seemed to applaud the move. Excite's stock jumped 3 3/4 to 9 7/8 on the Nasdaq. Shares of America Online rose 1 5/8 to 32 5/8.
Bell said that greater advertising revenue was the main impetus behind the deal but declined to give exact figures on the division of ad money.
"AOL will get the majority of the revenue and Excite will get the minority," he said.
This type of consolidation will become the norm in order for companies like Excite to survive, he explained. (127K WAV) or (127K AIFF)
Bell admitted some risk in giving AOL greater ownership of his company.
"All these deals right now are about dancing with the devil. This is a very fast-moving space," said Bell, adding that he felt AOL would be a strong partner.