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.