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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (23380)	6/21/1999 10:41:00 AM
From: Jenne	Read Replies (2) \| Respond to of 41369

GMH) America Online and Hughes Electronics Form Strategic Alliance to Market Unparalleled Digital Entertainment and Internet Services BUSINESS WIRE - June 21, 1999 10:31 DULLES, Va. and EL SEGUNDO, Calif., Jun 21, 1999 (BUSINESS WIRE via COMTEX) -- Will Accelerate Growth of DIRECTV, AOL TV, and Launch AOL-Plus High-Speed Internet Service via DirecPC Nationwide Satellite System AOL to Make $1.5 Billion Strategic Investment in Hughes America Online, Inc. (NYSE:AOL), the world's leading interactive services company, and Hughes Electronics Corporation (NYSE:GMH), the world's leading provider of digital television entertainment and satellite-based data services, today announced a strategic alliance to develop and market uniquely integrated digital entertainment and Internet services nationwide. The Companies said that this alliance will accelerate subscriber growth and revenue-per-subscriber for Hughes' DIRECTV television entertainment service and DirecPC satellite-based broadband Internet delivery system, as well as help develop and extend the reach of America Online's AOL TV interactive television and AOL-Plus high-speed Internet services. America Online and Hughes also plan to jointly develop new content and interactive services for the U.S. market and elsewhere in the world. This new alliance builds on the Companies' earlier agreement to develop a "combination" set-top receiver to make DIRECTV/AOL TV available to consumers next year. The Companies will launch an extensive cross-marketing initiative to package and extend the reach of both AOL TV and DIRECTV. Hughes and America Online will market the DIRECTV/AOL TV package to America Online's more than 16 million AOL and CompuServe members in the U.S., as well as to millions more consumers of its Internet brands. Hughes also will market AOL TV to its more than 7 million current DIRECTV subscribers, and to millions of potential new subscribers through its extensive network of retail outlets. The Companies will also make AOL-Plus available nationwide via the DirecPC satellite Internet network by early 2000. This initiative builds on America Online's recently announced partnerships with Bell Atlantic and SBC Communications to deliver DSL broadband connectivity to AOL members. The DirecPC network provides broadband download speeds up to 14 times faster than the standard 28.8 kilobits-per-second analog modem. AOL-Plus members will be able to transmit information back over standard telephone lines at speeds as fast as 56.6 kbps. Hughes Network Systems, a unit of Hughes, provides the DirecPC system and service, and will design and initially manufacture the combination DIRECTV/AOL TV set-top receiver. The alliance will also enhance the development of Hughes' next-generation satellite system for two-way, broadband connectivity, known as Spaceway(tm), scheduled to launch in the year 2002. Hughes is investing $1.4 billion to design, manufacture and launch the North American system and accompanying ground infrastructure. Under the agreement, America Online will make a $1.5 billion, strategic investment in a General Motors equity security, which carries a 6-1/4% coupon rate, that is automatically convertible into GM Class H common stock (GMH) in three years. GM will immediately invest the $1.5 billion in a security of Hughes under similar terms where it will be employed to implement the strategic alliance between AOL and Hughes. America Online said the investment would be non-dilutive to its earnings. Over the next three years, Hughes is making a major commitment to market AOL TV and AOL-Plus, as well as accelerate the growth of DIRECTV and DirecPC. Among its planned expenditures are: -- More than $500 million for AOL-Plus via DirecPC through both America Online brands and Hughes retail channels; -- Up to $500 million for DIRECTV, including more than $150 million in marketing to AOL members; -- Approximately $400 million for the combined DIRECTV/AOL TV services; and -- Approximately $100 million for DirecDuo, which enables subscribers to access the DIRECTV and DirecPC networks with a single satellite dish. Hughes and America Online have agreed to explore making broadband satellite offerings available in Latin America as that market evolves. Alliance Advances "AOL Anywhere" and Hughes Internet and Interactive Strategies