America Online, Inc. and eMachines Form Strategic Alliance to Make PC Purchase and Internet Access More Easy and Affordable.

DULLES, Va. and IRVINE, Calif.--(BUSINESS WIRE)--June 30, 1999--

eMachines PCs to Prominently Feature Easy Access to AOL and CompuServe

$400 Rebates on eMachines PCs, Including $399 eTower, Offered

With a 3-Year Subscription to CompuServe 2000

America Online, Inc., the world's leading interactive services company, and eMachines, Inc., a low-priced PC manufacturer, today announced a strategic alliance designed to make getting online with eMachines PCs easier and more affordable.

Under the agreement, AOL and CompuServe 2000 software will be integrated into all eMachines personal computers, and will be accessible through icons prominently featured on the eMachines desktop. Also, AOL will make a minority investment in eMachines.

In addition, eMachines and AOL's CompuServe will offer a special limited-time retail promotion beginning early this summer. Under the promotion, consumers signing up for three-year memberships to the new and improved CompuServe 2000 interactive service will receive a rebate of $400 in connection with the purchase price of three models of eMachines computers, including eMachine's $399 eTower, as well as member perks, discounts and special offers.

"AOL's multi-brand strategy is designed to meet consumers' needs across a wide range of Internet brands and services, and we're looking forward to bringing this range of services to the growing value-oriented market attracted to eMachines' very competitive pricing and features," said Jan Brandt, President of AOL Marketing. "Consumers are increasingly purchasing PCs for the sole purpose of getting online, and when they do, they want easy access to the leading online brands like AOL and CompuServe. Participating with eMachines in this rebate program will give computer buyers even more incentive to sign up for the new CompuServe 2000, the value leader in Internet access."

"Our customers want value and competitive pricing, but they are also looking for a quality Internet experience," said Stephen Dukker, President and CEO of eMachines, Inc. "eMachines is proud to offer both first time PC consumers as well as those adding multiple PCs in the home the access to AOL's complete, easy-to-use and convenient online products right from our eMachines desktop."

About America Online

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 17 million members, and CompuServe, with approximately 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; and AOL MovieFone, the nation's No. 1 movie listing guide and ticketing service.

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.

About eMachines, Inc.

Founded in September 1998, eMachines focuses on desktop computers exclusively in the $399 to $599 price range. The company's Web site is located at www.e4me.com.