Wal-Mart has teamed with online DVD rental giant Netflix Inc. Under the partnership both companies will promote Wal-Mart DVD sales and Netflix DVD rentals.

As part of the deal Wal-Mart will close its online DVD rental business. In an advertisement the company's website said that new DVD rental customers will no longer be accepted.

Instead, Walmart Online directs customers to Netflix who will take over the online service. Current Wal-Mart DVD rental subscribers will be able to transfer their services to Netflix. New customers will pay the existing Wal-Mart price of $12.97 per 12 months for the first year of service.

Netflix, in turn, will advertise Wal-Mart's online movie sales business on its web site and in mailers sent to its 3 million subscribers.

Blockbuster, who began their own DVD rental service last year, is attempting to get in on the action by offering Wal-Mart customers who switch to its service a free DVD movie of their choice and current Walmart.com prices for the next year.

Netflix is the world's largest online DVD rental service.

Wal-Mart is the world's largest DVD retailer.

Netflix shares rose 23 percent from $15.50 on Wednesday's Nasdaq to $18.98 on the Inet electronic brokerage.