AOL Signs Major Internet Marketing Deal With Dixons
AOL has finally confirmed that it has signed a high-profile deal with Dixons to promote its dial-up internet services in the electrical retailer’s 1,100 stores throughout the UK.
The deal, which is thought to be worth around £100 million, follows the decision taken by rival internet service provider, Freeserve, not to renew its exclusive five year link with Dixons, once it expires next February.
The new alliance will see AOL become Dixons’ preferred internet provider, which means that computers bought from PC World, Dixons, Currys and The Link stores will come pre-loaded with the AOL dial-up internet service instead of Freeserve.
The agreement also includes promoting AOL’s broadband services from February 2005, when Freeserve’s existing contract with the electrical retailer expires.
Commenting on the deal, AOL’s chief executive, Karen Thompson, said: “We have already established an excellent working relationship with the Dixons team and believe that this deal represents great value for AOL in terms of subscriber growth and brand awareness.”
Freeserve claims the new terms proposed by Dixons would hamper its goal of reaching profitability in 2004. Over the last few years the ISP has steadily been reducing its reliance on Dixons for customer sign-ups and has secured deals with new partners such as Orange, Littlewoods and Texaco (see Freeserve Launches No Risk Broadband Promotion).
The latest figures show that Freeserve is currently the UK’s most popular internet service provider with around 2.7 million registered subscribers, while just over 2 million are signed up to AOL. However, reports suggest that the end of its exclusive arrangement with Dixons could threaten its market leading position.
Jan Dawson, a senior analyst at Ovum told the Guardian: “AOL’s deal with Dixons suggests it could win market share among new subscribers from Freeserve once it comes into effect in February 2004, and perhaps push to the top spot itself.”
Earlier this week Freeserve launched an integrated cross media advertising campaign to raise awareness of its new broadband promotion, which will offer users the chance to try its broadband service for a month and get their money back if they decide no to commit to a regular subscription (see Freeserve Launches No Risk Broadband Promotion).
AOL: 01268 530919 www.aol.co.uk
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