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.

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