AOL Posts Strong 1Q, Partners With Gateway



America Online today reported earnings and revenues that topped Wall Street's forecasts and said it will invest $800 million in Gateway as well as operate the PC maker's online service, Gateway.net. The two companies said they will work together to develop and market a range of hardware, such as home networking devices, a co-branded online store, broadband access and other products aimed at online consumers.

AOL earned $184 million, or 15 cents per diluted share, in its first quarter of fiscal 2000, compared with $50 million and 4 cents per share in the same quarter last year. Analysts had been predicting around 13 cents per share for the period. Revenues surged to $1.5 billion, 47% more than the first quarter of 1999. Advertising, commerce, and other nonsubscription revenues accounted for $350 million in the most recent quarter, which is double the level in the same period last year.

The online services and consumer marketing company added a net of 1.1 million new customers worldwide during the period, bringing its total for AOL properties to more than 18 million.

Also during the quarter, the Sun-Netscape Alliance, AOL's enterprise software partnership with Sun Microsystems, which is struggling to generate momentum in the market, said it had added to its customer list companies such as Chase Manhattan Corp. and Telecom New Zealand.

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