America Online To Be Available Through Pacific Bell Internet Service; New Alliance Broadens AOL's Market Reach, Pacific Bell Content Focus In California.

SAN FRANCISCO--(BUSINESS WIRE)--May 28, 1996--America Online, Inc. and Pacific Bell Internet Services announced their intention to offer customers of the California-based Internet service provider access to AOL, the world's largest online service.

Pacific Bell, which debuted its dial up Internet access service to 7 million California consumers and small businesses today, plans to feature America Online on its Pacific Bell Internet service and make the AOL software available to its subscribers.

"This is by far the most aggressive and comprehensive market deployment of consumer Internet access service by any regional telecommunications provider in the nation," said Dave Dorman, president and chief executive officer of Pacific Bell. "At the same time, we also plan to be a leader in creating convenient places where our customers, with one call to us, can access the broadest possible range of online content from leading online service providers like America Online."

Dorman said the Pacific Bell Internet-AOL alliance will give online users "the best of both worlds -- high quality and affordable access to the broad content and features of the Internet from us and a gateway to the rich array of premium content and variety of online communities through America Online."

With the announcement, both companies are aiming to tap into the explosive growth of the Internet market in California, which leads the nation in the percentage of consumers who own computers (47 percent) and have online accounts (11 percent).

"California consumers are early adopters of high technology and we believe there is great potential for growth and success by coupling Pacific Bell's tremendous reputation for service and reliability with AOL's industry-leading rich content and communities," said Steve Case, chairman and CEO of America Online.

Case added, "As we aim to reach the 89 percent of U.S. households who don't presently use any online service or have any Internet connection, we continue to believe simplicity is critical. AOL will continue to be offered as a simple, affordable, integrated, plug and play solution as we reach out to attract a mainstream audience. But in addition to providing this `one stop shopping,' we also want to make AOL available to consumers who opt to use Internet access providers, such as Pacific Bell Internet Services, so they too can experience the magic of AOL."

Pacific Bell Internet is available to residents and businesses in over 350 cities and towns in four key regions of California through a local call at speeds up to 28.8 Kbps (kilobits per second) everywhere. The dial up access service, which is available free for one month during a 90-day introductory period, offers flexible pricing and unlimited access for $19.95 a month.

Under the plan, Pacific Bell Internet customers would be able to reach America Online with a few easy mouse clicks. America Online expects to make the AOL service available at a reduced rate for all Pacific Bell Internet customers who use the service to gain access to AOL.

Both companies have signed a letter of intent to offer the AOL service. Pricing and availability will be announced at a later date. In the meantime, they will jointly test different pricing models to create a compelling package for consumers.

Pacific Bell Internet offers fast, reliable connections to the Internet, global e-mail and access to a vast array of directories and news and information with a distinct California "Cool" flavor and focus. The service also features a free, customized version of the latest Netscape Navigator(TM) Personal Edition client software.

This summer, Pacific Bell Internet expects to offer its subscribers ready access to At Hand(sm), a new Internet guide for California that features enhanced listings of products and merchants, local advertising and topical editorial content from Pacific Bell Interactive Media.

America Online, Inc., (NASDAQ Symbol: AMER), based in Vienna, Va., is the largest and fastest-growing provider of online services in the world, with more than 6 million members. Through its services, AOL offers its subscribers a wide variety of services including electronic mail, conferencing, software, computing support, interactive magazines and newspapers, and online classes.

Founded in 1985, AOL today has a global work force consisting of nearly 5,000 people. Personal computer owners can obtain America Online software at major retailers and bookstores or by calling 800-827-6364.

Pacific Bell Internet Services is a value-added full service Internet service provider serving business and residential customers in California. The company offers a broad range of Internet access services that feature simple, affordable ways for reaching the estimated 30 million users on the world's largest and most powerful computer network.

The company is a wholly owned subsidiary of Pacific Bell, the largest unit of parent company Pacific Telesis Group, a San Francisco-based diversified telecommunications corporation.

For more information on Pacific Bell Internet, customers can visit the company's site on the World Wide Web by typing in the URL prompt http://www.pacbell.net, send an e-mail message to [e-mail] or call toll-free 1-800-708-INET (4638).

CONTACT: America Online

Pam McGraw, 703/556-3746

[e-mail]

or

Pacific Bell Internet Services

Dave Miller, 916/972-2811 (Sacramento)

[e-mail]

or

Beverly Butler, 415/542-9468 (San Francisco)

David Dickstein, 213/975-4074 (Los Angeles)

John Britton, 213/237-2430 (San Diego)