America Online Inc has finally put some meat on the bones of its AOL Anywhere strategy to push its dominance beyond the PC and into other devices. Yesterday it announced its first partners for AOL TV, a television-based service delivered over digital satellite systems via set-top boxes. However, the satellite delivery is only one-way as users connect back to AOL TV via a 56Kbps dial-up connection, but it will also be enabled for Digital Subscriber Line (DSL) technology, where that is available.
The service will begin rolling out some time next year, though no firm date or prices have been determined. The company is now in a race for subscribers with the cable-based providers, led by AT&T Corp.
AOL will partner with Hughes Electronic Corp’s DirecTV Inc unit to deliver a combined DirecTV-AOL TV services to its 7 million or so subscribers in the US. Hughes Network Systems (HNS) will design and build a dual-purpose DirecTV-AOL TV set-top box and Philips Electronics has also agreed to produce an AOL TV-enabled set-top, based on a reference design from Boca Research Inc. The Philips boxes will use the MediaGX processors from National Semiconductor Corp’s Cyrix unit – one of the few parts of Cyrix that NatSemi has retained.
Finally, Network Computer Inc (NCI) will provide AOL with the software for the Philips and Hughes set-tops and its Connect Server will manage the services on the AOL TV service. General Motors Inc owns Hughes Electronic Corp, which is the parent of both DirecTV and HNS. AOL closed up $11.125, or 8.7% at $139.4375, helped by an upgrade from Morgan Stanley Dean Witter’s Mary Meeker who raised it to strong buy from outperform.
