America Online, Gateway, in alliance

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America Online and Gateway, a direct-to-consumer seller of consumer PCs, 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, combines the companies' 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. As part of the agreement, America Online will invest $800 million in Gateway 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.

Copyright October 1999, Crain Communications Inc.

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