AOL to give away PCs

AOL is, starting this weekend, tempting new customers with a very tasty carrot... A free PC

America Online Inc. has signed a bundling deal with eMachines Inc., including a package in which consumers get a free system when they sign up for CompuServe service. AOL will also take a minority stake in eMachines. Specific financial details of the deal were not released.

"Consumers are increasingly purchasing PCs for the sole purpose of getting online, and when they do, they want easy access to the leading online brands like AOL and CompuServe. Participating with eMachines in this rebate program will give computer buyers even more incentive to sign up for the new CompuServe 2000," AOL marketing president Jan Brandt said in a release.

Starting this weekend, AOL will offer a limited-time program where consumers who sign up for a three-year CompuServe 2000 service contract get a $400 (£245) rebate on an eMachines system. The rebate program covers a $399 eMachines tower system, AOL officials said.

The CompuServe service costs $21.95 per month for unlimited usage. As part of the marketing program, AOL and CompuServe icons will be featured on eMachines desktops. AOL's interest in cheap PCs should come as no surprise. The company was rumoured to be looking to acquire Microworkz, maker of a $200 computer/Internet appliance. Microworkz denied the acquisition rumour, but said that it was talking to AOL about a possible deal.

But the deal with eMachines simply represents "a good investment" said AOL spokeswoman Wendy Goldberg. "We invest in a lot of different companies. We see it as a great company to work with," she said. She said that AOL plans to offer the CompuServe rebate package with other PC makers and retailers.

AOL and eMachines aren't the only ones with this idea.

Microsoft Corp. is offering a similar rebate deal with computer chain Micro Centre. Consumers who sign up for a three-year ISP contract with Microsoft's MSN service will get a $400 credit voucher good toward the purchase of any computer at the store, including the $449 PowerSpec system.

Microsoft and Micro Centre had been testing the program, and on Wednesday announced it would be available at all of its stores and through its mail-order subsidiary.

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