America Online, Inc. and Travelocity.com Announce Multi-Year Content and Commerce Alliance Valued At Up to $200 Million.

DULLES, Va. & FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 4, 1999--

Travelocity.com to be Preferred Travel Services Provider for AOL 

America Online, Inc. (NYSE: AOL), the world's leading interactive services company, and Travelocity.com, the online travel expert, today announced that they have entered into a multi-year, multi-million dollar alliance through which Travelocity.com will become the exclusive reservations engine integrated into the AOL service, AOL.COM, CompuServe, Digital City and Netscape upon closing of the merger transaction between Travelocity and Preview Travel which was announced separately today.

The 5-year agreement will allow users to access the same set of travel reservations services from each of these AOL brands, providing a consistent and seamless experience from multiple access points. Following the closing of the merger, a portion of the $200 million total payment is guaranteed; the remainder will be guaranteed upon meeting specified performance thresholds related to a unique revenue sharing structure across both advertising and commission revenue streams for these AOL properties, and is designed to reward both companies based on the success of their trend-setting alliance.

The agreement will significantly enhance AOL's travel destination site by adding new services provided by Travelocity.com. AOL's new travel destination will span across the above-named AOL brands when it launches early next year. The 1998 America Online/Roper Starch Cyberstudy showed that 91% of online consumers who have ever made travel arrangements online said they found it to be easier than the way they did it before, and over two-thirds of online consumers prefer to book their travel reservations and tickets online.

AOL's Travel Channel is currently the number one travel destination on the web. According to August 1999 Media Metrix data, AOL's Travel Channel reached 7.3 million unique visitors among the home/work universe, 66% higher than its closest competitor. According to Forrester, travel is the most researched product online, and is projected to grow from $7.8 billion in 1999 to $32.1 billion by 2004.

The new service will give AOL members and visitors a one-stop solution for their leisure and business travel needs, backed by Travelocity.com's sophisticated reservations system, which simplifies and integrates online booking, extensive travel content, and numerous new trip-planning tools. The agreement between AOL and Travelocity.com will provide users with a personalized travel experience by joining the strengths of Travelocity.com and Preview Travel with AOL's personalization technology.

The agreement provides for promotion of Travelocity.com's services through anchor and other key placements within each of America Online's new comprehensive e-commerce areas: the Shop @ AOL, AOL.COM, Netscape, and CompuServe online shopping destinations. Travelocity.com's services will also be promoted through prominent positions in various other areas throughout AOL properties. The two companies will engage in online and offline cross-promotion, and Travelocity.com will make special offers to AOL users through the agreement with AOL.

"People are now planning and booking their travel online more than ever--and this new agreement, which will bring Travelocity.com's consumer-friendly tools and services to users of several key AOL, Inc. brands, will make it even easier," said Bob Pittman, President and Chief Operating Officer of America Online. "Working together, America Online and Travelocity.com will create the ultimate destination for consumers interested in browsing, planning, booking, or sharing information on travel--and a valuable resource for advertisers and smart marketers interested in reaching those consumers."

"By combining the power of Travelocity.com with the reach of America Online, this exclusive alliance will offer consumers the highest availability and choice of premium online travel services to AOL customers," said Terrell B. Jones, president of Travelocity.com. "With this value-added convenience, consumers truly can enjoy one-stop anytime, anywhere travel planning and booking."

About Travelocity.com

Travelocity.com is one of the largest online travel sites with $301 million in gross travel sales for the first half of 1999, exceeding the total $285 million it recorded for all of 1998. Based on last year's sales, it was ranked 19th in Travel Weekly's 1999 Top 50 U.S. Travel Agency Survey. To date, Travelocity.com has more than eight million registered members. In March 1996, Travelocity.com launched at www.Travelocity.com. In the United Kingdom, www.Travelocity.co.uk launched in November 1998 and in Canada, www.Travelocity.ca launched in April 1999.

Travelocity.com is owned and operated by Sabre. Travelocity.com provides reservations capabilities for 95 percent of all airline seats sold, more than 42,000 hotels, more than 50 car rental companies and more than 70,000 vacation packages. This reservations capability is paired with access to a vast database of destination and interest information.

About America Online, Inc.

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 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.