March 19, 2009, 12:00 AM

Discovery looks for efficiency in outsourcing e-commerce technology

After years of operating its own e-commerce platform, Discovery Communications targets efficiency and new web sites through outsourcing, chief operating officer Kelly Day tells Internet Retailer.

After years of operating its own e-commerce platform, Discovery Communications Inc. says now was the right time to outsource the job.

On Monday Discovery, No. 183 in the Internet Retailer Top 500 Guide, outsourced the operations of to Delivery Agent Inc., a third-party provider of online retailing, digital advertising and content services to entertainment companies.

Delivery Agent will provide a full range of services for, including web hosting, web site design, e-commerce platform management, merchandising, marketing, customer service and fulfillment. Delivery Agent will pay Discovery undisclosed royalty fees.

“In the e-commerce business today to really compete you either have to ramp up and be one of the biggest retailers in a particular segment with the technology infrastructure to back it up or be a niche provider doing most of everything in-house,” Discovery Commerce chief operating officer Kelly Day tells Internet Retailer. “We were in the middle and signing a deal with Delivery Agent fit with our business plan and made sense.”

Day says Discovery, which closed down about 100 stores two years ago to concentrate on e-commerce, had been approached by third-party e-commerce technology providers about outsourcing its online retailing operation. Ultimately Delivery Agent received the contract because it specializes in entertainment companies.

“Sometimes when the job is outsourced and the company does multiple sites, those sites can look the same and we didn’t want that,” Day says. “We like the fact that Delivery Agent was in our business and builds and maintains unique sites for each client.”

Discovery is beginning the process of moving its internal e-commerce platform, which is built on IBM WebSphere technology, over to Delivery Agent. Delivery Agent, which supplies services to companies such as NBC Universal Inc., Martha Stewart Living Omnimedia Inc. and Twentieth Century Fox Film Corp., later this year will also build web sites for two other Discovery brands: TLC and Animal Planet.

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