AOL signs global mobile deal

Internet provider America Online and Japan's NTT DoCoMo mobile communications company announced a wide-ranging tie-up Wednesday, giving the Japanese company a 42.3 percent stake in AOL Japan. The dlrs 100 million deal makes the Japanese cellular phone giant the largest shareholder in AOL's Japanese unit, and is expected to expand AOL's presence in Japan. AOL Japan, currently 50 percent owned by AOL and 40 percent by Japanese trading house Mitsui and Co., is having difficulty in attracting subscribers. The tie-up will give AOL a break into i-mode - access to the Internet through cellular phones. I-mode is wildly popular in Japan, where AOL's dependence on personal computers has stunted its growth. Officials said the main thrust of the alliance would be to team up for developing services that link personal computers and mobile phones, test their services in Japan and then market them internationally. NTT DoCoMo President Keiji Tachikawa said his company's input would make AOL a major player in Japa

Internet provider America Online and Japan's NTT DoCoMo mobile communications company announced a wide-ranging tie-up Wednesday, giving the Japanese company a 42.3 percent stake in AOL Japan. The dlrs 100 million deal makes the Japanese cellular phone giant the largest shareholder in AOL's Japanese unit, and is expected to expand AOL's presence in Japan. AOL Japan, currently 50 percent owned by AOL and 40 percent by Japanese trading house Mitsui and Co., is having difficulty in attracting subscribers. The tie-up will give AOL a break into i-mode - access to the Internet through cellular phones. I-mode is wildly popular in Japan, where AOL's dependence on personal computers has stunted its growth. Officials said the main thrust of the alliance would be to team up for developing services that link personal computers and mobile phones, test their services in Japan and then market them internationally. NTT DoCoMo President Keiji Tachikawa said his company's input would make AOL a major player in Japan. "There are too many players in the field," he told reporters at a joint news conference. "With our participation, we can create a new concept." Analysts agreed that the deal fills a vital need for AOL if it's going to be successful in Japan. NTT DoCoMo has some 12 million i-mode subscribers in Japan, while AOL only has about 440,000 fixed-line users. "America OnLine has had great trouble making progress here. Basically ISP (Internet) subscriptions are not growing in Japan for PCs," said Ben Wedmore, an Internet and software analyst at HSBC Securities (Japan) Ltd. "All the growth is in wireless." For NTT DoCoMo, the alliance will provide the unmatched content of the world's largest Internet service provider. The challenge will be to transfer that content to the i-mode format. "How many and how far sites can really be made to work on an i-mode phone remains to be seen, but I don't see why not," said Wedmore. "The whole story is good, it's just early days." The tie-up also adds a new dimension to the looming competition heating up between i-mode and Internet portals such as Yahoo Japan, said Nicholas Spratt, an Internet and media analyst at Lehman Brothers Asia Ltd. "While the competition between wireless portals and fixed-line portals isn't immediately apparent, as wireless Internet access grows as a media, we see the i-mode threat increasing," Spratt said. The companies said they will set up a senior-level working group to talk about developing new wireless technology, as well as promote AOL and i-mode Internet services in Japan. The agreement also makes two AOL services - AOL-Mail and AOL Instant Messenger - available on i-mode. The two companies also plan to set up a joint venture in the United States in a bid to promote the i-mode services throughout the world.