AOL, XM Satellite Confirm Alliance

Time Warner's(TWX) America Online unit and XM Satellite(XMSR) confirmed an agreement to set up a Web site that will stream portions of their respective radio offerings for an Internet audience.

The site will feature about 20 XM stations and AOL's 130 stations streamed for free, plus a premium version that includes more than 70 XM stations. The premium service will be available to AOL subscribers for free and to others for a monthly fee.

The agreement represents a marketing opportunity for XM, which with about 3.8 million subscribers is the larger of the two main satellite radio services (the other is Sirius(SIRI)). For AOL it is a chance to beef up its radio offerings in an increasingly competitive Internet niche that also includes Yahoo!(YHOO), Real Networks(RNWK) and most of the broadcast radio players.

"This relationship creates important and valuable opportunities across our core businesses enabling us to provide unique value for our large Web audience, enhanced programming for our existing and new AOL members, and the ability to introduce new premium services," AOL said in a statement.

In premarket trading, shares of XM were up 73 cents, or 2.4%, to $31.40, while Sirius added 9 cents to $5.50.

>To order reprints of this article, click here: Reprints