Bank One and Microsoft Ink Deal

More than just an advertising deal. That's how Bank One and Microsoft characterize their recently negotiated three-year strategic relationship, valued at more than $30 million.

"What I think makes it special between Bank One and Microsoft is the comprehensive nature of the deal," said Kevin Watters, senior vice president in the consumer Internet group at $270 billion Bank One. "The breadth of this is pretty impressive."

The agreement presents multiple opportunities to jointly promote and develop services and products for the two companies' U.S. customers, ranging from consumers to small and middle-market businesses.

Bank One will promote Microsoft products, including its MSN Internet service, to its 40 million customers. Microsoft will market Bank One's products and services to its 270 million monthly MSN users.

Microsoft can also tap Bank One's customers through its Financial Explorer and .NET Alerts Service. The Financial Explorer product will combine Microsoft Money, Internet Explorer and Bank One.com to allow customers to better manage their cash flow, do budgeting and asset allocation. Alerts can notify customers of pertinent financial information, such as account activity information and bill payment reminders, through either a computer, hand-held device or possibly a cell phone.

The deal also offers services for the bank's million-plus business customers. As part of the agreement, Bank One will integrate offerings with Microsoft's bCentral.com to deliver online small-business services in areas such as Web hosting, e-mail campaigns and online scheduling.

For the bank's 18,000 middle market customers, Microsoft's Great Plains financial software will integrate a range of Bank One's commercial solutions into its distribution channels to help small and medium-size businesses manage their finances more effectively. Bank One will also sell its commercial credit card and paycheck card through Great Plains, which is targeted toward middle market customers.

"From Microsoft's point of view, this is an opportunity for us to take the strengths across our company," said Christine Andrews, a product manager at MSN. "This is the type of thing that only companies such as Microsoft can do."

The relationship will also allow Bank One to take advantage of Microsoft's next generation online advertising products through its Advantage Marketing program. While it isn't exclusive, Microsoft reserves some of its most advanced ad technologies just for customers such as Bank One, Andrews said. "Because of the strategic nature of this deal, Bank One will be engaged more with a lot of our next generation ad technology. We wouldn't market these advertising products to just any company."

The digital marketing campaign began rolling out in January. Other pieces of the deal should be in place by the second quarter, including the alerts service, Financial Explorer and integration of the bank's commercial card and paycheck card into Great Plains.

"We're going to continue to work together and hopefully develop new products in the next three years that we can't think of today," said Watters. "Our assumption through this entire thing is that this is a long-term partnership."

To that end, the two companies have formed a joint steering committee with senior members of both organizations. "The onus will be on that joint steering committee to make sure we've got the pipeline full of ideas," said Watters. "And looking into the things that we've got already, I'm not worried about us not having enough ideas."