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

To: eCurl who wrote (26055)	7/20/1999 5:30:00 AM
From: puborectalis	Respond to of 41369

MORE ON DT... Deutsche Telekom plans investment in AOL HANDELSBLATT ENGLISH SUMMARY, Tuesday, 20 July 1999 Deutsche Telekom plans to invest in US online service America Online Inc. (AOL). Handelsblatt has learned that the German telecoms giant is involved in negotiations on the acquisition of a minority stake in the US market leader for online services. Talks were said to be at an advanced stage. A 10% stake in AOL would at current market rates cost at least $13bn. An investment of this size would thus swallow most of the DM17bn reserves which Telekom set aside from its secondary public offering. Sources said that Sommer had given highest priority to the expansion of Telekom's presence on the Internet - ahead of its planned acquisitions of, or possible merger with, other telecommunications groups. However, a number of antitrust issues would have to be resolved before an investment in AOL could proceed. In Germany, Telekom is the market leader in online services (via its subsidiary T-Online), while AOL Deutschland is the number two on the market. A spokesman for Telekom declined to comment on this latest report, or on any other reports that it was in talks with potential partners. "We do not comment on speculation as a matter of principle," he said. Sommer plans to strongly boost Telekom's presence on the Internet. Several weeks ago he announced that T-Online, which at present is active only on the German market, would be expanding abroad, It would initially move into other German-speaking countries, but later into other European countries. With an investment in AOL, this goal could be achieved in one fell swoop. A partnership with Telekom could also make sense for AOL. On the one hand, the group is pressing for improved access for its clients to the Telekom network. On the other hand, it plans to participate in the privatisation of Telekom's television-cable network in order to secure a place for its online service on the broadband network. AOL operates the United States' largest online service with around 14 million subscribers. It has a market share of more than 40%. Its market value is seen at around $130bn. Some 61% of its share capital is held by institutional investors, with 1% in the hands of its founders, including chief executive Steve Case. AOL has subsidiaries in Latin America, Japan and Europe. AOL Europe is a 50/50 joint venture with media group Bertelsmann. In Germany, AOL has 900,000 subscribers, compared to T-Online's 3.3 million. The gap between the two rivals has further widened over the past few months, after T-Online announced massive price cuts in April. AOL has also come under pressure in other European countries, since a growing number of service providers have started to offer online access at no additional charge. In response to this, AOL Europe announced Monday that it would also launch free-of-charge Internet access under the name "Netscape Online" in Britain. In Germany, AOL plans to launch a flat-fee service with effect from autumn, which will allow customers to use the service for a monthly charge of DM20. However, telephone charges will still have to be paid in addition. TOP \| BACK HOME \| NEWS \| INVESTOR ONLINE