Dell might think TV's not the answer, but Case isn't taking the risk of it not:
AOL to invest $1.5 billion in Hughes
By Bloomberg News
Special to CNET News.com
June 21, 1999, 7:50 a.m. PT
America Online, the largest online service, said it will invest $1.5 billion in General Motors' Hughes Electronics and form an alliance to provide digital entertainment and Internet services.
America Online will receive a General Motors equity security, which will pay 6.25 percent annually, that is convertible into GM Class H common stock in three years.
AOL wants to develop
more options and faster service to help maintain its No. 1 position. The Dulles, Virginia-based company said last month it would join with Hughes and DirecTV to develop its Internet television product, called AOL TV, and to compete with new interactive services being offered by cable-TV companies.
"This is an alliance of the No. 1 brand in interactive services and the No. 1 brand in digital television entertainment," Hughes chief executive Mike Smith said.
The companies said the alliance will accelerate customers growth and revenue per customer for Hughes's DirecTV satellite television service and its satellite-based high-speed Internet access service, DirecPC.
AOL and Hughes have already agreed to develop set-top boxes to provide DirecTV and AOL TV to customers next year. The companies said AOL's high-speed Internet service, AOL Plus, will be available over Hughes' DirecPC satellite network early next year.
The companies also said they will market the services to AOL's 16 million customers in the United States as well as Hughes' more than seven million DirecTV customers.
The alliance and investment will help Hughes develop its new satellite-based system for high-speed Internet connections, called Spaceway. Hughes is spending $1.4 billion to design, build and launch that system sometime in 2002.
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