FOR IMMEDIATE RELEASE
AMERICA ONLINE, INC. AND SUN MICROSYSTEMS, INC.
FORM STRATEGIC ALLIANCE
Will Accelerate Growth Of E-Commerce
And Develop Next-Generation Internet Devices
Three-Year Development and Marketing Agreements
Sun to Become A Lead Systems and Services Provider to AOL
DULLES, VA and PALO ALTO, CA, November 24, 1998 — America Online, Inc.
(NYSE: AOL), the world’s leading provider of branded interactive services,
and Sun Microsystems, Inc. (NASDAQ: SUNW), a leader in network computing
products and services, today announced that they have entered into a
strategic alliance to accelerate the growth of enterprise-class e-commerce,
and to use Sun’s Java technology to develop selected Internet devices that
will help Internet users access America Online brands from anywhere,
The alliance follows America Online’s separate announcement today that it
will acquire Netscape Communications Corporation.
Under their definitive three-year development and marketing agreements,
America Online and Sun will work together to develop the most comprehensive
suite of easy-to-deploy, end-to-end solutions to help companies and
Internet service providers rapidly enter the e-commerce market and scale
their e-commerce operations. Sun will become a lead systems and service
provider to America Online, with America Online committed to purchase
systems and services worth $500 million at list price from Sun through 2002
for its e-commerce partners and its own use.
America Online will receive more than $350 million in licensing, marketing
and advertising fees from Sun, plus significant minimum revenue
commitments, over the next three years.
Steve Case, Chairman and Chief Executive Office of America Online, said:
“The development of e-commerce is entering an exciting new stage.
Increasingly, companies are seeing the power of the Internet as central to
their business strategies and consumers are seeing the convenience of
online commerce as central to their lives. We are confident that working
with Sun will make it much easier and faster for us to help companies set
up shop online, as well as to rapidly build their e-commerce businesses.”
Mr. Case added: “By acquiring Netscape and working with Sun to provide
winning e-commerce solutions, we will be able to both broaden and deepen
our relationships with business partners who need this additional level of
infrastructure support, and to provide more value and convenience for
Internet consumers. We share with Sun a vision for the future in which
consumers will be able to access America Online brands anywhere, at any
time, and from any device, and we believe that with this alliance, we can
make this happen more quickly.”
Scott McNealy, President, CEO and Chairman of Sun Microsystems, said: “As
we rapidly move towards the networked age, major corporations are turning
to Sun to provide the equivalent of ‘dial tone’ in their computing
networks. Internet commerce requires continuous operation, infinite
scalability yet consumer-friendly ease-of-use. By combining the strengths
of Sun with AOL and its brands, we can lead our customers into the
electronic commerce marketplace of the future – into the networked age.”
Complementary E-Commerce Strengths
The companies said that their strategic alliance will take advantage of the
complementary strengths of America Online, Sun and Netscape. These include
America Online’s success as an Internet service provider and its industry-
leading consumer reach, Sun’s expertise and global reach as an enterprise
software and network computing leader, and Netscape’s suite of e-commerce
software and services. Together, the companies will be able to offer
complete turnkey solutions along with modular software flexibility and
consulting services to enable e-commerce partners to put their businesses
online quickly and scale rapidly to meet consumer demand.
The new offerings will allow customers to completely outsource their
electronic commerce operations, with America Online providing everything
from Internet traffic and application connectivity to online marketing,
orders, billing and payments. Sun and America Online will also market their
e-commerce solutions to customers, including other Internet service
providers, who want to create part of the solution themselves. The products
will be available on Sun’s Solaris operating environment as well as on
other operating systems.
Sun will initially be able to sell AOL’s Netscape-branded suite of
middleware software, with both companies using each other’s sales channels
and customer relationships to market their existing products and services.
As new products are developed, both companies will sell the next-generation
e-commerce solutions. Sun’s large sales and service organization will
provide technical support for these products and services.
Ed Zander, Sun’s Chief Operating Officer, said: “Sun’s focus on developing
scalable, carrier-grade network services is now greatly enhanced. Today’s
announcements with America Online further establishes Sun as the partner of
choice to meet the needs of both service providers and major organizations
worldwide. We are demonstrating the value of Sun’s Java and Jini
technologies and how they will enhance new world commerce.”
Included in the alliance is a commitment by Sun and America Online to
develop the next generation Netscape Navigator and Communicator software
clients. In addition, America Online will support the Java technology from
Sun in its e-commerce solutions, including the soon-to-ship version 1.2 as
well as PersonalJava.
A major focus of the alliance will be to utilize PersonalJava to offer
America Online services across a range of next generation Internet devices,
consistent with its “AOL Anywhere” strategy to extend its brand to all
emerging mass- market platforms. PersonalJava is specifically designed for
small, nomadic devices such as a personal digital assistant, cell phone or
pager. This will further establish the Java platform as a leading software
environment for these emerging Internet-based personal and business tools.
America Online plans to support multiple technologies in its e-commerce
solutions and to support multiple platforms in the development of
next-generation Internet devices.
About America Online, Inc.
America Online, Inc., based in Dulles, Virginia, is the world’s leader in
branded interactive services and content. America Online, Inc. operates two
worldwide Internet online services: America Online, with more than 14
million members; and CompuServe, with approximately 2 million members.
America Online, Inc. also operates AOL Studios, a leading builder of
Internet brands for new market segments. Other branded Internet services
operated by America Online, Inc. include AOL.COM, the world’s most accessed
Web site from home; Digital City, Inc., the No. 1 branded local content
network and community guide on AOL and the Internet; AOL NetFind, AOL’s
comprehensive guide to the Internet; AOL Instant Messenger, an instant
messaging tool available on both AOL and the Internet; and ICQ, an instant
communication and chat technology on the Internet.
About Sun Microsystems, Inc.
Since its inception in 1982, a singular vision, “The Network Is The
Computer” has propelled Sun Microsystems, Inc. (NASDAQ: SUNW), to its
position as a leading provider of high quality hardware, software and
services for establishing enterprise-wide intranets and expanding the power
of the Internet. With more than $10 billion in annual revenues, Sun can be
found in more than 150 countries and on the World Wide Web at
This release contains forward-looking statements within the meaning of the
“safe harbor” provisions of the Private Securities Litigation Reform Act of
1995. The forward-looking statements are based on the current expectations
or beliefs of the respective managements of America Online, Inc. and Sun
Microsystems, as well as on a number of assumptions about future events,
and are subject to factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. The reader is cautioned not to put undue reliance on
forward-looking statements, which are not a guarantee of future performance
and are subject to a number of uncertainties and other factors, many
outside America Online’s and Sun’s control. The forward-looking statements
in this release address subjects including future financial and operating
results, growth of the online commerce industry, availability of online
commerce solutions on various operating systems, and the development and
success of new online commerce devices, technology and platforms.
The following factors, among others, could cause either America Online’s or
Sun’s actual results to differ materially from those described in the
forward-looking statements: the inability to identify, develop and achieve
commercial success for new products and services and access and
distribution technologies pursuant to the development and marketing
agreements; the risk that the Netscape business will not be integrated
successfully into America Online’s business; costs related to the merger;
increased competition and its effects on pricing, spending, third-party
relationships, the subscriber base and revenues; reliance on network
service providers; risks of new and changing regulation in the U.S. and
For a detailed discussion of these and other cautionary statements, please
refer to America Online’s filings with the Securities and Exchange
Commission, especially in the Forward-Looking Statements section of the
Management’s Discussion and Analysis section of America Online’s Form 10-K
for the fiscal year ended June 30, 1998 and in the 10-Q for the quarter
ended September 30, 1998, and in the Risk Factors section of America
Online’s most recently filed registration statement on Form S-3 filed in
In addition, for a detailed discussion by Sun of the above risks and other
risks and uncertainties, as well as related cautionary statements, please
refer to Sun’s filings with the Securities and Exchange Commission,
including, without limitation, Sun’s Report on Form 10-K fo its fiscal year
ended June 30, 1998 and its Report on Form 10-Q for its fiscal quarter
ended September 27, 1998.
AOL: Tricia Primrose, 703-265-1746
Sun: Susanne Vagadori, 408-517-6711