RealTime IT News

AOL, Tribune Company Shift Relationship

America Online Inc. and the Tribune Co., which have jointly run the Digital Cities Inc. since 1996, on Friday restructured their relationship, in an agreement that puts Digital Cities fully in AOL's hands, and puts the Tribune Company's content on the network of local sites.

The deal calls for the Tribune Co., which operates the Chicago Tribune as well as businesses in 23 major US markets, to sell AOL its 20 percent stake in Digital Cities. The financial details of the transaction weren't disclosed. This gives AOL complete control to operate the fast-growing network of 200 Web sites serving local markets. Presumably, the Tribune Co. will hold onto its stake in AOL, which stood at 5.3 million shares in May.

Also under the agreement, Tribune will provide branded local news and sports content for 14 Digital City markets, including 7 of the top 20 markets. In addition, Digital City will feature Tribune's BlackVoices.com, a site serving the African-American community.

Tribune also agreed to promote Digital City through Tribune media properties in these markets, including both television and print.

"Working with Tribune will enable us to provide our consumers with first-rate, trusted local news and sports content from the top newspapers and broadcast outlets in most of the top markets," said Paul DeBenedictis, president of AOL's Digital City.

The relationship between America Online and the Tribune Co. dates back to 1991, when the two companies launched Chicago Online, the first locally-oriented online venture on AOL. Subsequently, the companies founded the Digital City network in 1996.