The agreement creates a new co-branded Internet service provider (ISP) and numerous cross-marketing initiatives between the two companies.
The new ISP, co-branded by Wal-Mart and America Online, Inc., will be especially significant for consumers who live in smaller Wal-Mart communities and those who have been affected by the digital divide. Currently, approximately six out of every 10 towns in which Wal-Mart operates have local Internet access, and the companies have agreed to work together to increase the availability of local Internet access to communities that do not now have it available. This also is consistent with Wal-Mart’s history of bringing contemporary retail shopping advantages to small-town America.
The new co-branded Wal-Mart/AOL ISP will be a customized version of the CompuServe service, priced for value-conscious consumers, and will also include Parental Controls capability, which allows parents to determine which sites their children access. Wal-Mart customers will be provided software they can use to quickly and easily create an online account with the new Internet service offering local access.
In addition to the in-store distribution of the co-branded Wal-Mart/AOL ISP, Wal-Mart will also distribute AOL 5.0 software that includes a convenient link to Wal-Mart’s Internet shopping destination, Walmart.com.
As part of the agreement, Wal-Mart also will promote both the Wal-Mart/AOL co-branded ISP and the AOL flagship interactive service, through print, radio and television advertising, and in-store promotions.
Walmart.com also will be available in the Shop@ areas across America Online’s brands. The redesigned Walmart.com will be introduced Jan. 1 and offer an expanded roster of products and select services that will be available to Walmart.com users as well as AOL’s more than 19 million members.
The companies also announced that they would be exploring the most effective means to market a full range of next-generation interactive devices and services – such as AOL TV – designed to appeal to Wal-Mart customers.
Bob Pittman, America Online’s President and Chief Operating Officer, said: It’s always been a key priority for us to be everywhere our customers are, and with new segments of the mass market coming online there’s no better way to do that than work with Wal-Mart. This strategic alliance brings together the world’s largest retailer and the global leader in interactive services for the most significant retail marketing campaign for interactive services to date. This relationship provides us with a great opportunity to introduce new users to all the benefits of the Internet and enrich the experience of all online consumers.
Lee Scott, Wal-Mart’s Chief Operating Officer and Vice Chairman, said: We are taking this step to benefit our customers. Millions of our customers will be enabled by this agreement to obtain affordable, convenient Internet service, and to access our online store. The combination of Wal-Mart’s affordable online offerings and AOL’s reach to more than 19 million households represents a significant opportunity for value-conscious Americans. This agreement is very consistent with our heritage. We are bringing a new form of shopping to people in small to medium-sized communities across the country.
