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Under the terms of an alliance disclosed Tuesday, RadioShack will open store-within-a-store displays at up to 5,000 Blockbuster locations over the next two years. This summer, RadioShack will enter about 130 Blockbuster stores in Las Vegas; Norfolk, Va.; Austin, Texas; and Tulsa, Okla. A nationwide rollout is set for 2002. RadioShack will operate the displays and pay Blockbuster licensing fees. The companies will share cash flow from the RadioShack areas and collaborate on cross-promotional and marketing opportunities.

The RadioShack merchandising areas will range from kiosks to 600-square-foot sections. Inventory decisions haven't been made; at first, the stores will focus on RadioShack's most popular items.

The companies said the alliance bolsters Dallas-based Blockbuster's position as a full-service home entertainment store, while expanding Fort Worth, Texas-based RadioShack's efforts to reach new customers, particularly women and young people.

As news of the deal hit the Street, both stocks climbed on the

New York Stock Exchange

. Blockbuster gained 34 cents, or 2.5%, to $13.82. RadioShack was up $1.25, or 3.1%, to $40.95.