AOL, Wal-Mart in UK Marketing Pact

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America Online concluded a four-year strategic marketing agreement with Wal-Mart this month that will put AOL disks in the 240 Wal-Mart-owned ASDA retail stores in the United Kingdom. At the same time, the two companies took a joint 22.5 percent stake in ShopSmart, a U.K. shopping portal.

Sources said Wal-Mart had been interested in buying a ShopSmart stake in order to have access to the portal's comparative shopping and editorial rating features. AOL agreed to the investment in order to help ease negotiations for the ASDA pact.

"This is a big deal for us," said Andrei Bogolubov, chief communications officer at AOL Europe. "I can't share the details with you, but we have some internal projections on the value of this thing, and it could be one of the biggest we have in Europe."

ASDA will give AOL UK distribution across the United Kingdom. "They're a very reputable retailer here and exactly the kind of partner we look for," he said. "They will make the shopping experience that much better for our members."

The stores also will allow AOL members to assess products on offer and receive special promotions. In return, "ASDA will be integrated into the AOL UK shopping, interests and lifestyle channels as a preferred food and drink retailer," an AOL statement said.

The deal also will give Wal-Mart -- which, in addition to ASDA, has stores in Germany -- "one of Europe's most targeted online audiences," Bogolubov said. "AOL members spend more time online than anyone else in Europe."

AOL has similar alliances with merchants in various parts of Europe. In the United Kingdom, for example, Thornton Chocolates is a preferred partner, giving AOL customers a chance to buy chocolate online. A flower shop and a music store are also AOL partners.

"These relationships are not as far advanced in Europe as they are in the U.S.," Bogolubov said, "but we expect them to take off." Forrester Research, Cambridge, MA, projects explosive online growth in Europe over the next six months as people shop more online.

Equally important, Bogolubov said, is a trend to a flat rate for surfers who in most countries still must pay by the minute, plus expensive phone tolls.

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