America Online to Offer Access in Europe

Joint Venture Plans to Tap Markets in Germany, France, Britain

by Elizabeth Corcoran

Friday, May 19, 1995

America Online Inc. of Vienna and German media giant Bertelsmann AG said yesterday that they had formed the first of three companies that will serve up their on-line computer network service in Europe by the end of the year.

The as-yet unnamed firm, which will offer network access to German computer users, will be headed by a former Bertelsmann executive, Jan Buettner. America Online and Bertelsmann are planning to create separate companies in France and Britain as well. They aim to begin offering on-line computer service in those three countries by the end of the year, said Pam McGraw, a spokeswoman for America Online.

Bertelsmann and America Online announced in February that they were establishing the joint venture. Bertelsmann is financing the $100 million venture while America Online is "bringing its 10 years of expertise in on-line services," McGraw said. When the companies signed the official agreement in mid-April, Bertelsmann became a minority shareholder in America Online, with a 5 percent stake and one seat on its board.

Stock in America Online edged lower again yesterday, closing at $35.37 1/2, down 25 cents on the Nasdaq stock market. That followed two rocky days for the stock, in reaction to NBC's announcement Tuesday that it plans to make news and eventually video images available exclusively over Microsoft Corp.'s forthcoming on-line network.

By Wednesday's close, America Online stock had fallen almost 15 percent, or $6.12 1/2, closing at $35.62 1/2 a share. The stock reached a six-month high of $46.37 1/2 a share April 28.

Lisa Thompson, an analyst with Unterberg Harris in San Francisco, predicted that America Online's stock may receive more blows as publicity about the Microsoft Network continues to grow in the summer. Microsoft hopes to launch the network in late August when it officially begins to sell copies of its newest personal computer operating system software, Windows 95.

Ironically, enthusiasm about the Internet hasn't helped America Online, Thompson said. "There's a lot of talk about the Internet taking business from the on-line companies," she said, even though all the major on-line companies, including America Online, have plans under way to offer customers a way to reach the Internet.

America Online is nonetheless continuing to enhance its Internet strategy. Last week, the company offered those who use a Windows-based personal computer its "web browser" software that helps users peruse what many call the most exciting part of the Internet, the graphic menus collectively called the World Wide Web.

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