NetAdvantage chief executive Khaldoun Tabaza described the Al Jazeera website as "the most popular website inside and outside the Arab world", something which prompted his company to sign the agreement.
"Another motive was the growth of the online advertising in the Arab world," Tabaza said. "We expect that Aljazeera.net will grow to dominate a third of the share of the total online advertising expenditure in the Arab world."
The two are forecasting the online advertising expenditure in the Arab world to reach at least $8m by the end of 2004.
Al Jazeera launched its English-language website during last year's war in Iraq. The site was attacked several times by hackers. In one instance, web surfers were redirected to a porn site.
Hamad Al Nuaimi, Al Jazeera's director of marketing, said: "This agreement is clear proof of the growing role of online advertising in the Arab world and its transformation from a niche advertising sector into a mainstream sector attracting the budgets of big spenders and leading marketers in the region."
The deal comes as Arab satellite news station Al Jazeera says it will launch its English-language channel in May. The launch is designed to expand the Doha-based channel's reach beyond Arabic-speaking viewers in the Middle East and the West.
The new channel will include not only news but sport and children's programming as well.
Al Jazeera hopes that it will be able to capitalise on the publicity it got during the war in Iraq.
News of the launch follows criticism of the station earlier this month from the Western and Arab world.
The US has also hit out at the station again, criticising its coverage of the wars in Afghanistan and Iraq.
Prince Abdul Aziz ibn Bandar, the newly appointed assistant to the director of intelligence in Saudi Arabia, accused Al Jazeera of inciting terrorism. He described as "an act to incite terrorism", footage aired by the channel purporting to show the suicide bombers of a Riyadh residential compound minutes before they carried out their attack last November.
"This is not surprising. Since its launch, this channel incites terrorism. This incitement is not since the events of September 11 2001 but long before," he said.
Al Jazeera has hit back at the criticism and its managing director Wadah Khanfar said the network tells "reality through our own eyes" and expresses the frustration of Arabs.
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