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AOL, Columbia House in Multimillion Dollar Alliance

America Online, Inc. Wednesday signed a three-year, multi-million dollar marketing agreement with music services company Columbia House.

Specific financial terms of the deal were not disclosed.

The agreement names Columbia as the preferred music service on AOL. Terms of the alliance include online and offline advertising promotions, product bundling, direct mail efforts and co-marketing and advertising campaigns.

Columbia House, which claims 13 million club members, has agreed to promote its music, video and DVD clubs on several AOL properties, including AOL's Shopping Channel, AOL.COM, CompuServe, Digital City and Entertainment Asylum.

Columbia House will also allow club members to receive AOL software along with Columbia's mailings. In addition, Columbia is guaranteeing AOL an unspecified minimum number of new members.

When AOL members click on Columbia House icons, ads will direct users to a customized, co-branded home page specifically designed for AOL's audience, complete with exclusive deals just for AOL members.

"Columbia House understands that the online medium brings a whole new level of convenience to clubs as they reach out to potential members," said Bob Pittman, AOL's president and chief operating officer.

"Through this alliance, Columbia House will enhance our members' online experience by enabling them to join music, video and DVD clubs more easily and conveniently than ever, as well as create new opportunities to increase our membership. We're really looking forward to making a well-respected and household name like Columbia House available to our members."

"We've achieved excellent results to date from expanding our traditional Club business into the online environment," said Bill Ostroff, vice president of Columbia House Interactive.

"There is no better way for us to strengthen our presence in this medium than partnering with AOL, which has the largest member base of any interactive services company.

"Selecting AOL as our preferred interactive service presents a clear win for us both in terms of reaching and servicing our existing members and acquiring new customers."



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