Updated from 3:32 p.m. EDT
Facing antitrust worries over its proposed takeover of
moved Tuesday to expand its reach in other ways, unveiling several agreements including a plan to promote
online search services.
America Online will get $50 million for putting GoTo.com's pay-for-placement listings on search results pages of AOL and the AOL.com and Netscape Netcenter portals. The alliance builds on previous pacts between GoTo.com and two other America Online brands,
GoTo.com, which fashions itself as a "cost-efficient" alternative to other Internet search engines, gives certain Web sites greater prominence than others based on how much the businesses behind them are willing to pay. GoTo.com shares rose briskly, finishing Tuesday up $3.81, or 20%, at $23.31.
In another announcement, Dulles, Va.-based America Online said that beginning Tuesday users will be able to access a number of AOL features -- including email, news and stock quotes -- on any of
In mid-June, AOL announced that it had struck a similar deal with
. America Online has not disclosed the financial details of either agreement.
"Email has become a way of life for many, as has relying on the Internet for a huge range of information, services and e-commerce," Tom Trinneer, vice president of data product development for AT&T Wireless, noted in a statement. "The need for mobile access to email and the Web continues to drive the adoption of wireless devices."
And America Online did not stop there. As part of its continuing bid to extend its services beyond the realm of the personal computer, the giant Internet service provider said AOL's more than 23 million members also will be able gain access to AOL email, instant messaging and news via
wireless Internet service.
The spate of news, however, failed to distract investors, who seemed fixated on recent discussion surrounding the company's proposed $129 billion acquisition of Time Warner. America Online stock dropped 56 cents to finish at $57.19 Tuesday. Shares of New York-based Time Warner, meanwhile, dipped $2.59 to finish at $81.78.
A report in the
Monday said the
Federal Trade Commission
would consider blocking the merger if the combined company fails to open Time Warner's cable network to competing Internet service providers.
Regulators apparently are worried that the combined entity would dominate high-speed cable lines in markets in which Time Warner operates cable systems. Time Warner, though, already has inked a deal with Internet service provider
Juno Online Services
to offer access, and the company has pledged to keep the cable systems open to others.
Eric London, an FTC spokesman, declined to comment on the report.
Kathy McKiernan, a spokeswoman for America Online, highlighted the Juno accord in an effort to demonstrate the companies' commitment to open access. "No one has done more to advance that cause," than Time Warner and America Online, she said in a telephone interview.
"Our ongoing conversation with the regulatory agencies are proceeding well," and the two companies are confident that they will settle all of the antitrust issues and close the deal in the fall, McKiernan added.
Posing yet another problem, the combined company could face restrictions on its relationship with AT&T, the nation's largest cable operator, according to a report in the
Wall Street Journal
The latest developments in the AOL-Time Warner saga do not bode well for AOL's stock in the short term, and over the long haul may tarnish some of the deal's promise, noted Andrea Williams Rice, an analyst with
Deutsche Banc Alex Brown
The concerns are
unlikely to derail the proposal, she argued, but they do add uncertainty to the companies' quest. She said she rates AOL shares a "strong buy," despite the antitrust jitters, and added that her firm has not done any underwriting for the company.
"What has been leaked out of the FTC raises some questions about whether the deal is feasible," she said, "and if so, at what cost?"