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Apple Takes $200 Million EarthLink Stake

Apple Computer Inc. Wednesday took a $200 million stake in Internet provider EarthLink Network Inc. as part of a multi-year partnership to deliver Internet services to Mac customers in the United States.

Apple will also have one seat on EarthLink's board of directors.

EarthLink (ELNK) will become the exclusive Internet service provider for Apple and its setup software will be included with Macintosh computers sold in the U.S. In return, Apple (AAPL) will profit from each new Mac customer that subscribes to EarthLink's ISP service.

Steve Jobs, Apple chief executive officer, said the companies' partnership would produce a quality Internet experience for Mac users.

"EarthLink and Apple share a passion for providing the highest-quality Internet access to Macintosh users, and together we're going to do it better than anyone else," Jobs said.

Garry Betty, EarthLink president and chief executive officer, said being the provider-of choice for Mac users was important to their continued acquisition of new Internet users.

"The alliance allows both companies to capitalize on each other's strengths while combining the power of the Mac with the power of the Internet," Betty said. "This partnership will bring our industry-leading Internet services to an increasing number of Macintosh users, right out of the box."

Internet service will be offered to new and existing Mac customers. During the initial introduction of Internet services, new customers will get a free month of service and their setup fee will be waived.

In related news, Apple beefed-up their Internet strategy with the introduction of a new category of services dubbed iTools.

As a part of the program, Apple redesigned their Apple.com Web site featuring iReview and iCards. Web filtering, mail forwarding, personal storage space for file sharing and a home page starter kit are part of the Apple's online retooling.

Jobs said iTools is a revolutionary new category of Internet services that takes advantage of Apple's unique technology on both ends of the Internet.

"Our new iReviews, iCards and the revolutionary iTools offer amazing new ways for Mac users to take full advantage of the Internet," Jobs said. "Mac users can now do things on the Internet that Wintel users can only dream of."



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