AOL and AAPT finally stitch up deal

The long-awaited deal between AAPT and America Online has finally come to fruition, with the two organisations announcing today a 50/50 joint venture to operate AOL Australia.

Under the deal, the joint venture will launch a new internet portal to deliver wireless content services and through exclusive rights will offer AOL and CompuServe services on both PC and mobile wireless platforms throughout Australia.

AOL and AAPT confirmed the joint venture would capitalise on AAPT's Australia-wide sales, marketing and distribution channels, and network infrastructure. The joint venture will contribute significant cost savings to AOL Australia, as well as providing AOL Australia with access to AAPT's 650,000 Australian customers, the companies said.

Ron Nissen, AAPT's chief operating officer, dismissed industry speculation that the telco was obliged to dole out over $100 million to AOL to be included in the joint venture, although he said the telco expected to spend $100 million over the next two years on research and development for the project.

The new organisation has already seen its first casualty: AOL Australia's managing director, Carol Veriga, has stepped down and will be replaced by Dr Brett Wayn while the joint venture finds a CEO.

According to officials, Veriga will remain with AOL Australia in the short term as a consultant while Wayn, currently director of AOL Australia content and programming, will move to the position of general manager to oversee the organisation's day-to-day operations. No other staffing changes were planned, according to AOL international vice president Tom Hardart.

Nissen said both AAPT and AOL still needed to resolve issues related to converting AOL content to AAPT's existing infrastructure, in terms of both technology and content. An appropriate balance of global and local content was yet to be finalised, the companies said.

The joint venture did not expect details of its wireless web portal, including pricing structure, will be finalised for some months to come. "We haven't finalised the details of how we're going to execute," Nissen said.

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