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Silvercarrot Buys Web Rewards Program

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NEW YORK -- As a part of an aggressive acquisition strategy, online direct marketer SilverCarrot on Monday snapped up Milesource, a two-year-old Web rewards site.

SilverCarrot adds about 1.2 million members to its database of 10 million consumers through the cash and liability transaction. The 23-person operation will also absorb MileSource's four staffers, who are relocating to SilverCarrot's New York headquarters.

Three-year-old SilverCarrot provides Web-based loyalty and viral programs to clients in the financial, telecommunications and travel industries. Milesource, formerly owned by Mass Medium, rewards its members with miles for shopping at partner sites, including Staples.com, EddieBauer.com and BarnesandNoble.com; the miles are redeemable for such products and services as free flights, vacation packages, merchandise and gift certificates.

The acquisition is likely the first of several for SilverCarrot, which said it expects to close another deal by the end of the year. "We believe that strategic acquisitions will allow us to broaden our reach, expand our presence and add quality senior management to our team," said Allan Levy, founder and CEO of SilverCarrot. The company said it plans to make nearly $1 million in 2002.