America Online, the leading Internet company in the US, has signed an advertising deal with FirstUSA expected to generate $500 million (€441 million) over the next five years.

Thought to be the largest Internet advertising deal on record, it is a vote of confidence in the new medium by FirstUSA, the largest credit card lender in the US. FirstUSA has been an enthusiastic proponent of online marketing and in recent months signed a $90 million deal with Microsoft and a $125 million deal with Excite for promotion over the Internet.

The company has established itself as the biggest financial services advertiser on the Internet. It relies largely on direct mail to promote its range of differently branded credit cards ranging from a University of Tennessee affinity card to a cycling enthusiast's card. However, the Internet can provide equally precise methods to promote the highly targeted cards.

"If we know somebody is looking at the Website of their Alma Mater we can suggest an affinity card linked to it," FirstUSA said. It added that its experience indicated that customers won through online promotions were no worse, and possible better, than those won through other channels.

The deal is also a coup for AOL, which under the leadership of Mr Steve Case is rapidly expanding its e-commerce capabilities, helped by the planned acquisition of Netscape, the Internet software company.