28 May 1999

In this issue. . .

Investor Relations Day

1999 Special Olympics World Games In North Carolina

Investor Relations Day - May 19, 1999

Steve Case And Jim Barksdale

The following is the latest installment in our series of updates designed to put America Online's business developments into perspective. In this FYI, we review the highlights of America Online's annual, all-day session with investors and analysts, which the Company held today in Washington, D.C. The Company's executives covered a wide variety of topics, including:

Momentum Across the Board
Strong subscriber growth momentum continues, with 4.1 million new domestic members and 900,000 international numbers added in the 12 months to March 31, 1999. AOL's advertising and commerce annual run rate now exceeds $X billion. A majority of members are on AOL for five to seven days a week and an average of 55 minutes per day - with multiple family members increasingly sharing accounts. AOL International now has X million members and a revenue run rate of more than $X00 million.

You've Got Pictures and AOL Calendar
You've Got Pictures and AOL Calendar will be rolled out this year and the multi-band AOL 5.0 will begin rolling out by year-end. CompuServe usage is increasing and it's gaining subscribers for the first time in three years. Netscape is offering "Custom Netcenters" and there will be further integration of Netcenter and AOL as an at work/at home combination. AOL.COM is now the number one combined home/work site and is increasingly finding an audience with non-AOL members, who are generating more than 8 million page views a day. ICQ's growth continues, with registered users exceeding X million. Digital City continues to lead the local category and will benefit from cross promotion with AOL MovieFone.

A New Shopping Initiative
Extending its e-commerce leadership, AOL announced a new shopping initiative that will be distributed across all AOL brands. Branded Shop@AOL on the AOL network, the new platform features a consumer-centric design with state-of-the-art tools and a branded shopping experience, with consistent navigation, product search, personalized buying guides, a certified merchant and AOL guarantee and Quick Check-out. AOL announced that its members spent over $X billion in the March 1999 quarter, exceeding the holiday quarter, with X million AOL members buying online for the first time. Shop@Netcenter and Shop@CompuServe will be rolled out later this year.

Narrowband Drives Broadband
AOL will use a multi-vendor broadband strategy in order to achieve a national ubiquitous reach, including cable, DSL, satellite and wireless. Over the next five years, AOL expects to spend approximately $X billion on access. Underscoring that broadband is a narrowband add-on - not a replacement - Bob Pittman noted that X% of AOL members currently using an identifiable broadband connection are also maintaining their $21.95 AOL accounts. Pittman said that AOL's performance in high speed cable markets is better than its national average, benefiting from its leading brand position, with penetration and member retention higher.

AOL Plus
The Company announced that its new DSL initiative, AOL Plus, is being initially deployed through agreements with SBC and Bell Atlantic, whose combined services cover X% of AOL homes. AOL Plus will be rolled out this summer with Bell Atlantic and with SBC in the fall. AOL Plus applications will include: enhanced multimedia, music applications, and enhanced e-commerce. AOL expects that home networking among multiple devices will be the first killer broadband application. A key to AOL's broadband strategy is to offer members all the services unique to broadband in addition to all the narrowband features, services and content they now receive, so that broadband is truly an "add on" -- not a replacement.

AOL Anywhere
Interactive services are moving rapidly into a new phase marked by connected interactivity through a wide range of devices and delivery systems. AOL is ramping up its AOL Anywhere strategy and the Company said it expects to roll out a series of new devices beginning later this year, including screen phones, Palm Pilots, and by mid-2000, AOL-TV. AOL has forged several partnerships that are key to the development of AOL-TV, including agreements with Philips Electronics, DirecTV, Hughes and NCI. Prototypes of several AOL devices including Palm Pilots were on display during the conference. More devices will translate into more usage of AOL, extending its reach, increasing ubiquity and providing additional revenue streams.

"Silicon to Eyeballs" E-Commerce Initiatives
With Netscape's Enterprise business and the Sun alliance augmenting consumer brand efforts, AOL is pursuing a range of e-commerce initiatives. There is a growing need for businesses to get connected to their customers and to each other, and Netscape is the leading provider of the enterprise software that helps to make this happen. Through the alliance with Sun Microsystems, Netscape and AOL are providing a unique end-to-end solution from silicon to eyeballs, featuring a family of production-ready applications and infrastructure products for e-commerce. Since the alliance's launch, Netscape has won significant new business, including E*Trade, First Union Bank, Daimler-Benz Chrysler, and Shell Information Services. Major systems aggregators committed to alliance software include Arthur Andersen, EDS, Ernst & Young, CSC and PriceWaterhouseCoopers.

Growing Financial Strength
AOL's business is gaining momentum on all fronts and is driving the growth of the Net economy. Over the past 12 months, AOL has increased revenue by $X billion, or X%. AOL is delivering on its financial commitments and will continue to take advantage of several margin-enhancing opportunities, including increasing revenues from advertising and e-commerce sales, utilizing its shared infrastructure and the addition of broadband and new devices over time.

Special Olympics in North Carolina

1999 Special Olympics - World Summer Games

Raleigh, NC June 26- July 4

Schedule of Events (Preliminary)

Saturday, June 26

Founders Reception - 4PM - Carter Finley Stadium- Raleigh, NC

  • Open to: Honored Guests, VIP's and other Special Guests
  • Honored Guest Credentials Required (20 allotted to AOL- Please notify Ina Feinberg at 703-265-3431 by May 28 if interested in attending.)
  • Opening Ceremonies 6PM - 11PM (Free and open to All) at Carter Finley Stadium

Sunday June 27 - Saturday, July 3

2PM - 8PM Daily

World Games Festival - Web Pages, via Netscape and AOL; Email and Internet Access

AOL will occupy a 30' x 40' tent in the sponsor area of the World Games Festival which is located on the campus of Meredith College in Raleigh, NC. We will assist Special Olympics athletes in creating personal web pages utilizing Netscape's Netcenter webpage tool and provide email and internet access to spectators and visitors.

Our tent will be co-joined to the Kodak tent where Kodak will be taking the digital photos of athletes (and others ) that can be imported into the web pages. The "Starting Line" will be in the Kodak tent where they will have their photo taken; they go to the "Online/Finish Line" area in the AOL tent to create and, if they wish, printout the webpage.

Our "Coaches Corner" presentation area in the center of our tent will demonstrate webpage creation to small groups of visitors who can then go to the computers and work at their own pace. In between presentations we will run our Safe Surfin' Video.

AOL Hot Air Balloon

Plans are for the AOL hot air balloon to be tethered in the World Games Festival area on Sunday, June 27 only. Permission pending from Meredith College, we may be allowed to launch the balloon at the end of the day.

West Olympic Village - Computers and Internet Access (Tentative participation)

AOL is possibly supplying internet access and computers for athletes who are housed in the student dorms in the University of North Carolina Chapel Hill - Student Union. This sponsorship is tentative based on availability of existing computers that may be made available to the athletes by the University. (This would alleviate additional staffing resources required of us in that location.)

AOL Cycling Venue Sponsor

As sponsor of the Cycling Competion, the AOL Brand will be prominently featured on all banners promoting this event. No staffing resources are required at this venue. Cycling competitions are scheduled throughout the week. Brand Marketing is supplying AOL water bottles for the athletes.

Wednesday, June 30

NASCAR DAY at Special Olympics

Sponsors are invited to participate in bringing their corporate racing teams to Meredith College Campus adjacent to the World Games Festival where there will be a line up of corporate racing teams. AOL will be participating with the AOL racing team for the day.

Sunday, July 4

Closing Ceremonies - Free and Open to All

For more information on the 1999 Special Olympics World Summer Games: Visit the Official 1999 Special Olympics World Summer Games Website .