AOL and Sun 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, anytime.

The alliance follows America Online's announcement 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.

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.

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