AOL Unveils Two-Way Paging Device to Access E-Mail

December 1, 2000

NEW YORK (Reuters) - Internet media giant America Online Inc. (AOL.N) said Thursday it unveiled a new two-way paging device designed for access to AOL e-mail and instant messaging services.

The device, called AOL Mobile Communicator, is a result of AOL's pact with Research in Motion Ltd.(RIMM.O) struck in February. The device is produced by RIM, which makes the popular BlackBerry pages, but will be branded by AOL.

``The code for the device was written by us so it is an AOL product and we will provide the service directly to the end-users,'' said Dennis Patrick, president of AOL's wireless unit, in a phone interview.

AOL has taken the Research in Motion two-way pager and developed client software that operates on the device, which is a two-way data radio that operates on BellSouth Corp.'s(BLS.N) wireless data network nationwide.

AOL, whose merger with No. 2 U.S. cable provider Time Warner Inc (TWX.N). is still awaiting regulatory clearance, chose to brand the device as its own because executives felt they had to have a more integrated approach to creating and rolling out since it involved AOL's e-mail and instant messaging services.

The AOL Mobile Communicator, which was expected by some analysts last month, fits into the Internet services provider's AOL Anywhere strategy, which aims to extend its reach to devices beyond the personal computer.

The device can be purchased online for $329.95 and the service is available for a subscription fee of $19.95 a month.

While Patrick said he would never rule out the possibility of accessing content over the device, he was confident at this point that having simple, clean access to e-mail and instant messaging from the device was what people were looking for.

Merrill Lynch analyst Henry Blodget said in a research note that he expects the device to be a big hit eventually.

``We estimate AOL could sign up 300,000 plus subscribers from RIMM and future device manufacturers by the end of 2001 and 1.1 million by the end of 2002,'' Blodget said. ``At current prices, this would generate $30 million to $35 million in revenue to AOL in 2001 and about $160 to $165 million in revenue in 2002.''

Shares of AOL sank to a fresh 52-week low of $39. It was last off more than eight percent at $39.85. An overall decline in Internet stocks and some uneasiness over regulators' review of AOL's purchase of Time Warner weighed on the stock.