AOL TO ACQUIRE COMPUSERVE ONLINE SERVICES, RECEIVE CASH AND GAIN SIGNIFICANT NETWORK COMMITMENTS IN AGREEMENTS WITH WORLDCOM, INC. AND BERTELSMANN AG; AOL to Sell Its ANS Communications Subsidiary to WorldCom; Agreements to Accelerate Global Momentum in Core AOL Networks and AOL Studios Businesses.DULLES, Va.--(BUSINESS WIRE)--September 8, 1997--America Online, Inc. (NYSE NYSE See: New York Stock Exchange :AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. ) today announced that, in exchange for its ANS (ANS Communications, Inc, Purchase, NY) An ISP, Internet backbone and provider of private data network services, founded in 1990 as Advanced Network & Services, Inc., by IBM, MCI and Merit (consortium of Michigan universities). Communications, Inc. subsidiary, it will acquire CompuServe Corp.'s worldwide online services business from WorldCom, Inc. and receive $175 million in cash. Upon completion of the transaction, valued in total at approximately $425 million, AOL's European partner Bertelsmann AG Bertelsmann AG German media company. Beginning as a religious printer and publisher in 1835, the company grew steadily over the next century. Though virtually destroyed by Allied bombing in 1945, it recovered quickly after World War II. will pay an additional $75 million to AOL, and each company will invest $25 million in an expanded joint venture to operate CompuServe's European online service. AOL also entered into a long-term strategic relationship with WorldCom providing AOL with significantly expanded network capacity for its service at favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. prices. This includes agreements with WorldCom that will not only allow AOL to expand its current narrowband In communications, transmission rates up to T1 speeds (1.544 Mbps). The upper limit is moving target. At one time, narrowband meant 150 bps (that is 150 bits per second!). Then, the upper limit became 2,400 bps. Later, it moved to 64 Kbps. Contrast with wideband and broadband. access at a faster pace, but also will have the companies collaborating on the deployment of a next-generation broadband network. Further strengthening their alliance, AOL Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Steve Case Steve Case (born August 21, 1958) is a businessman best known as the co-founder and former chief executive officer and chairman of America Online (AOL). He reached his highest profile when he played an instrumental role in AOL's merger with Time Warner in 2000. is expected to join WorldCom's board of directors. In separate announcements today, WorldCom, CompuServe and H&R Block Inc. disclosed their agreement under which WorldCom will acquire all of CompuServe Corporation (company) CompuServe Corporation - The parent organisation of CompuServe Information Service, CompuServe Network Services and CompuServe Remote Computing Services. CompuServe was owned by H.R. Block but is now (1999) owned by America On-Line. http://compuserve.com/. , thereby facilitating this transaction with AOL. AOL said the WorldCom and Bertelsmann agreements will: Accelerate AOL's momentum in the global marketplace, especially in Europe; Strengthen its position in the small business and professional markets; Grow its non-subscription revenue streams through an increased customer base; Enable it to focus on its core assets - AOL Networks and AOL Studios - while providing added financial resources and operational flexibility to grow and enhance those businesses; Enhance the AOL member experience through the short-term addition of up to 100,000 modems from UUNET (UUNET Technologies, Inc., Fairfax, VA, www.uunet.net) Founded in 1987, UUNET was the first commercial Internet service provider. Originally offering e-mail and news, it became a full Internet service organization providing dial-up and leased line accounts as well as archive space for , long-term network commitments from WorldCom, and access to CompuServe's business and professional content; Improve the CompuServe online customer experience by supporting next-generation technological innovations now under development by CompuServe, and exploring possibilities for leveraging AOL's easy-to-use features and products; Realize immediately the enhanced value of ANS - which it acquired in 1995 for $35 million, while ensuring reliable network services through WorldCom at favorable prices. Mr. Case stated: "AOL has made tremendous strides forward over the past year and this transaction will boost our momentum by concentrating our focus on AOL's core interactive services and content businesses. In addition, the acquisition of CompuServe's interactive services will help fuel our global expansion - especially in the critical European marketplace, which we believe is poised for tremendous growth. The expansion of our international reach will help make the interactive medium a global phenomenon and provide us with new opportunities to apply our scale, expertise and resources. Both AOL and CompuServe online customers will benefit as we enhance their interactive experiences, providing unmatched ease-of-use and expanded content to meet their needs." Mr. Case added: "The transfer of ANS to WorldCom will allow us to realize significant value for an asset which, for the past 2-1/2 years, has been an important part of our successful effort to build out AOLnet with a diversified diversified (di·verˑ·s portfolio of suppliers. As part of WorldCom, ANS will be a strengthened supplier of dial-up and Internet access See how to access the Internet. to AOL Networks. For AOL, the agreement locks in network price savings while partnering us with a company that can help assure our members the broadest, most reliable access, now and in the future. "We also look forward to working with the talented employees of the CompuServe online services and welcoming them to the AOL family." John Sidgmore, WorldCom Vice Chairman and Chief Operations Officer, and UUNET CEO, said: "We are very pleased to be acquiring ANS, a pioneer of the Internet and now one of the world's leading corporate network services companies. With our long-term agreement with America Online See AOL. , we also are looking forward to helping meet the rapidly growing network capacity needs of the world's leading Internet online service and working together to develop next-generation broadband solutions. We also look forward to welcoming Steve Case to our board of directors where we believe his expertise and vision will be a most valuable addition." The Combined Internet Online Services CompuServe's interactive division currently has 2.6 million members worldwide. On Sept. 2, 1997, AOL announced its own global membership had surpassed 9 million. In Europe, the partnership between AOL and Bertelsmann will become the leading pan-European Internet online service provider less than two years after launching its service. The addition of CompuServe's over 850,000 online customers to AOL Europe's nearly 700,000 members would result in a combined total of more than 1.5 million. The merger would extend the AOL-Bertelsmann partnership's existing reach in Germany, the United Kingdom, France, Austria, Switzerland and Sweden, and give the partnership access to a number of markets now served by CompuServe's Internet online services. Beyond the U.S. and European operations, AOL would add over 300,000 CompuServe online members in the rest of the world including Japan, where AOL launched its own service in April, and Canada, where AOL has over 100,000 members. CompuServe's online division also has services in Asia, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Australia. Bob Pittman, President and CEO of AOL Networks, said: "At AOL Networks, the Internet online business is our only business and we are positioned to provide the best service possible to CompuServe's online customers and provide the best possible home to CompuServe's interactive division employees. We will use AOL Networks' scale, resources and expertise to make the combined operations For the department of the British War Office during World War II, see . In the military, combined operations are operations conducted by forces of two or more allied nations acting together for the accomplishment of a single mission. See also
"We will continue CompuServe's existing online brand and focus on small business and the professional-oriented user here and internationally, by providing the existing service with the existing platform. In addition, we will seek ways to use the relative strengths of CompuServe's on-line services in the business and professional markets and AOL in the mass market to improve the Internet online experience for both sets of customers," Mr. Pittman concluded. Thomas Middelhoff Thomas Middelhoff (born May 11, 1953) is a German corporate manager. Since May 2004, Middelhoff has been chairman of the supervisory board of Arcandor, and since May 12, 2005 he has been CEO of the company. , who is a member of the Executive Board and designated Chairman and CEO of Bertelsmann AG, said: "This transaction further strengthens the strategic alliance between Bertelsmann and America Online. We will continue to grow our AOL membership in Europe and to develop CompuServe's online services as a significant independent brand in the European Internet online market. "This transaction will help position us as the leading player in the rapidly growing European Internet online service market, and help build a new mass medium in interactive services," concluded Middelhoff, who also is a member of the America Online board of directors. Expansion of AOL's Network Access AOL Networks will continue to manage AOLnet - the world's largest dial-up network-through a portfolio strategy that now includes WorldCom's UUNET, in addition to GTE/BBN and Sprint. From this team of providers, AOL expects to have access to approximately 650,000 modems by year's end - more than triple its modem capacity of January 1997. Mr. Bruce Bond, President and CEO of ANS Communications, said: "ANS has made great strides as part of AOL and we look forward to future success as part of WorldCom. Not only will ANS continue to supply network capacity to AOL, but it will be an excellent strategic fit with UUNET and CompuServe's corporate network services to help make WorldCom a more significant worldwide provider of corporate network services." The transaction, which is subject to regulatory approvals and approval by CompuServe shareholders, is expected to close within six months. About America Online America Online, Inc. (NYSE:AOL), based in Dulles, Virginia Dulles, Virginia is an unincorporated census-designated place located in Loudoun County, Virginia, part of the Washington Metropolitan Area. The headquarters of AOL, Orbital Sciences Corporation and ODIN technologies and the former headquarters of MCI Inc. are located in Dulles. , founded in 1985, operates three business units: AOL Networks is the world's most popular Internet online service, providing its more than 9 million members worldwide with easy-to-use, convenient information, entertainment and state-of-the-art features and products supported by world-class member support; AOL Studios develops original content programming and interactive properties for AOL Networks, Internet Service Providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. , other online services, independent Internet sites, and other media companies; and ANS Communications is a leading provider to businesses, including AOL, of global network communication systems and services. Personal computer owners can obtain America Online software at major retailers and bookstores, by calling 800-827-6364, or by downloading from http://www.aol.com . This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. In particular, careful consideration should be given to cautionary statements made in the Company's reports filed with the Securities and Exchange Commission. CONTACTS: Tricia Primrose primrose, common name for the genus Primula of the Primulaceae, a family of low perennial herbs with species found on all continents, most frequently in north temperate regions. 265-1746 or Michael Gross Michael Gross is the name of several people:
703/265-2359 or Richard Hanlon 703/265-1007 |
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