THIS IS HUGE!!!! I'd be covering in the A.M. In fact I don't think I could sleep if I were short this stock right now. 2 A.M. wakin' up with cold shakes.... eerrrr! Scary!
America Online and Gateway Announce Wide-Ranging Strategic Relationship to Accelerate Growth of AOL Services, Gateway.net and Next-Generation Internet Devices
Business Wire - October 20, 1999 16:59
DULLES, Va. and SAN DIEGO--(BUSINESS WIRE)--Oct. 20, 1999--
No. 1 Consumer PC and No. 1 Interactive Services Companies Align to Drive a Simpler, More Accessible Internet Experience for Consumers
AOL to Utilize Its Infrastructure to Operate Gateway's Successful ISP,
Gateway.net, With More Than 600,000 Subscribers
For the First Time, AOL to be Featured On Gateway PCs
America Online, Inc. (NYSE:AOL), the world's leading interactive services company, and Gateway (NYSE:GTW), the country's biggest seller of consumer PCs, today announced a wide-ranging agreement that will accelerate distribution of each company's products and services, create new personalized Internet services and ramp up the AOL Anywhere vision of Internet access across multiple devices for consumers in the home and on the go.
The agreement, the first between the two companies, puts the AOL and Gateway powerhouse consumer brands together in front of an unmatched combined customer base that includes AOL's 18 million members and the users of their other brands, Gateway's five million customers and the more than 50,000 people a day that connect with Gateway through its phone and Web sales channels and through its innovative Gateway Country retail locations nationwide.
The companies will combine their complementary sales and distribution channels and capabilities in the development of hardware, software and Internet content to co-market a full range of world-class products and services designed to further simplify the Internet for mainstream consumers.
The strategic relationship will focus on a number of key initiatives:
-- Simplified, Integrated Registration - For the first time, the AOL
service will be featured and aggressively marketed on all Gateway
PCs, in addition to Gateway.net. Consumers can choose their
Internet service and, thanks to Gateway's built-to-order model,
will have that service pre-loaded and personalized on the Gateway
PC that's delivered to their home, allowing for quick and easy
access to the Internet. AOL and Gateway will share in the
economics of the Gateway.net and AOL subscribers registered
through the Gateway channels.
-- Internet and Home Networking Devices - The two companies will
advance America Online's "AOL Anywhere" strategy by developing
and marketing Internet and home networking appliances as more and
more consumers extend their Internet online habits beyond a
single PC. The companies, which expect to begin introducing these
Internet appliances within the next few months, will utilize
their respective distribution channels, including the more than
180 Gateway Country stores nationwide, to bring these products to
market. Eighty-five percent of the country is within a one-hour
drive of a Gateway store.
-- Online Software and Hardware Marketing - AOL and Gateway will
collaborate on a major co-branded online software store, which
will be marketed to the companies' combined customer base. This
store and the Gateway.com hardware store will be featured across
AOL's brands and Gateway marketing channels giving consumers
convenient access to online shopping for their technology and
Internet needs.
-- World Class Service and Personalization for Gateway.net - America
Online will use its infrastructure and online expertise to
operate Gateway's successful ISP, Gateway.net, with its more than
600,000 subscribers, providing all network operations,
registration, billing and customer service. Gateway.net will
continue to operate as a stand-alone brand, and offer
personalized content, features and functionality from AOL,
CompuServe and Netscape, as well as other Internet partners. This
advances AOL's strategy of leveraging its infrastructure across
multiple brands, and furthers Gateway's objective of becoming a
world-class Internet service provider focused on the individual
needs of its users, while improving the economics and quality of
the service.
-- Hands-On Internet Training - Gateway and AOL will also take
advantage of Gateway's retail presence to create computer and
Internet training programs for AOL subscribers and Gateway
customers, recognizing that the vast majority of consumers and
businesses have only just joined the ranks of online users and
begun to tap the wealth of information and opportunity that the
Internet offers. These training programs will be made available
to consumers and businesses both through the more than 180
Gateway Country Stores and online.
-- The Latest Access Technology - Gateway and AOL plan to jointly
offer broadband services, utilizing Gateway's built-to-order
model for maximum flexibility to meet consumers' broadband needs.
Gateway's retail presence will also help showcase broadband and
further consumer adoption.
-- International Reach - The companies also agreed to explore
opportunities internationally.
As part of the agreement, America Online will invest $800 million in Gateway, Inc. over a two-year period, in a combination of cash and equity securities. Of the $800 million, Gateway will be taking $180 million in AOL stock. In addition, Gateway will make an $85 million commitment to market software and Gateway products and services on America Online's brands.
America Online expects to take a pre-tax charge of $30 million in connection with its acquisition of an interest in Gateway.net subscribers in the quarter in which the transaction closes.
Gateway expects to take a pre-tax charge of $26 million in the fourth quarter of this year for a combination of restructuring charges, transition costs associated with the transaction and costs incurred to build Gateway.net infrastructure.
New Agreement Simplifies the Internet for Consumers
Jeffrey Weitzen, Gateway's President and Chief Operating Officer, said, "As the Internet fans out into the mainstream and changes the way families live, work, learn and play, people are looking for technology leaders like Gateway and AOL to drive out complexity and simplify the Internet. This exciting new relationship does just that."
Continued Weitzen, "AOL's infrastructure, scale, expertise and access to millions of potential customers will only strengthen Gateway's position as the leading PC player in the Internet space. Together, we'll offer world-class products, services and brands at every point in the Internet value chain -- from PCs, other connected devices and home networks to the full package of interactive services and training. We're extremely excited about what this new partnership means to our tens of millions of joint customers and potential customers."
Bob Pittman, America Online's President and Chief Operating Officer, said: "For the first time, AOL and Gateway are joining forces -- bringing together the world leaders in consumer interactive services and consumer PCs. This is a win-win agreement for both companies and our customers. AOL's brands will benefit from Gateway's industry-leading distribution channels including its exciting retail presence - and huge popularity among consumers."
Pittman added, "Gateway was the first PC manufacturer to start its own ISP, recognizing that the Internet was a major reason why people buy PCs, and we're pleased they have decided to work with AOL to take this business to the next level. Because our strengths and vision are so complementary, we look forward to working with Gateway across a full range of initiatives, including the joint development of next-generation devices and other products and services, including broadband, that will make the medium more accessible and more valuable to consumers."
The agreement is expected to close by year's end, subject to the customary regulatory approvals.
About America Online
Founded in 1985, America Online, Inc., based in Dulles, Virginia, is the world's leader in interactive services, Web brands, Internet technologies, and e-commerce services.
America Online, Inc. operates: two worldwide Internet services, America Online, with more than 18 million members, and CompuServe, with more than 2.2 million members; several leading Internet brands including ICQ, AOL Instant Messenger and Digital City, Inc.; the Netscape Netcenter and AOL.COM portals; the Netscape Navigator and Communicator browsers; AOL MovieFone, the nation's No. 1 movie listing guide and ticketing service; and Spinner Networks and NullSoft, Inc., leaders in Internet music.
Through its strategic alliance with Sun Microsystems, the Company develops and offers easy-to-deploy, end-to-end e-commerce and enterprise solutions for companies operating in the Net Economy.
About Gateway
Gateway (NYSE:GTW), a Fortune 250 company founded in 1985, focuses on building lifelong relationships with consumers and businesses through complete technology personalization.
Gateway ranked number one in U.S. consumer PC revenue in the second quarter of 1999(1) and was rated among the top ten best corporate reputations in America according to a survey conducted in the fall of 1999 by The Wall Street Journal and Harris Interactive, Inc.
Gateway employees worldwide serve clients with services and built-to-order computers that consistently win top awards from leading industry publications. Gateway had total global revenue of $7.5 billion in 1998 and shipped 3.54 million systems. For more information, visit Gateway's Web site at www.gateway.com.
(1)According to GartnerGroup/Dataquest US PC Quarterly statistics.
Notes to editors:
News Conference Call-in:
Wednesday, October 20, 1999 at 6:30 pm Eastern Time. Participants: Bob Pittman, President and Chief Operating Officer, America Online; and Jeff Weitzen, President and Chief Operating Officer, Gateway.
Call-in numbers: Domestic: 800/619-3383, Passcode AOL
International: 712/271-0720, Passcode AOL
Replay number: 402/998-1186 (no passcode needed).
Video News Release:
A video news release on the Gateway-AOL strategic relationship including soundbites from Bob Pittman, President and Chief Operating Officer, America Online; and Jeff Weitzen, President and Chief Operating Officer, Gateway; feed also includes b-roll from both companies, will be fed as follows:
October 20, 1999 4:15-4:30 PM Galaxy 6 Transponder 5 c band
7:00-7:15 PM Galaxy 6 Transponder 5 c band
October 21, 1999 4:30-04:45 AM Telstar 6 Transponder 8 c band
10:45-11:00 AM Telstar 4 Transponder 23
CONTACT: America Online
Ann Brackbill, 703/265-1746
or
Tricia Primrose, 703/265-1746
or
Gateway
Brad Shaw, 619/799-3957
or
John Spelich, 619/799-2657 |
