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Sears, America Online Make Super Couple

Two of the most readily recognized brands in America Tuesday formed a groundbreaking alliance.

Sears, Roebuck and Co. (S) and America Online Inc. Tuesday formed a strategic alliance designed to leverage both corporations strengths to bring the Internet and related emerging technologies into millions more American homes.

America Online's (AOL) interactive products and services will be marketed to Sears customers nationwide. Simultaneously, Sears merchandise and services will be marketed to AOL members as well as visitors to its Web-based brands.

Bob Pittman, AOL president and chief operating officer, said Sears and AOL are brands that millions of Americans know and trust.

"This relationship provides us with a great opportunity to introduce Sears customers to all the benefits of AOL and the Internet," Pittman said. "By combining the strengths of our two strong consumer brands, we will make it even more convenient and easy for people to take full advantage of AOL's industry-leading interactive services."

Alan J. Lacy, Sears Services president, said the far-reaching alliance is focused squarely on creating more value for the customer.

"The coupling of AOL's leadership in interactive services with Sears strength in retail, services and credit provides us both with opportunities to offer new services to our customers," Lacy said.

"It also brings the convenience of the Internet to more Sears customers, while increasing the level of promotion for Sears Web sites. The alliance clearly creates a firm foundation for future growth," he added.

AOL becomes Sears' preferred online service provider offering a co-branded edition of AOL's start-up software with links to Sears for point-of-purchase promotion in the retailer's 858 stores nationwide. Sears credit card holders will have the option of paying for their monthly AOL subscription with their Sears Card. The retailer currently has 39 million active cardholders.

AOL also plans to develop a co-branded version of its instant messenger service to enable consumers to initiate online, real-time communications with Sears customer service, as well as with friends, family and business colleagues.

The alliance includes future plans to market and sell broadband access as the market develops, and for joint marketing of internet-enabled wireless devices. The companies also into to develop new broadband home improvement content as well as broadband installation and service.

The specialized version of AOL with links to Sears is expected to launch in the second half of this year. Under the agreement, joint Sears-AOL offerings will be made available to nearly 60 million Sears customers nationwide. Sears will also promote AOL and its in-store offerings in its print and television advertising programs and in other promotional and marketing campaigns.

AOL's 23 million members will also receive special offers from Sears. AOL will provide prominent branding and promotion of Sears online businesses across America Online brands. Sears online product categories that will be promoted include appliances, tools, lawn and garden equipment, home electronics and others.