Dell Computer Corp. on Monday entered a multi-year marketing deal with America Online Inc. that could strengthen the computer maker's $1 million-a-day online business. Dell added 1 7/16 to 69 5/16 and AOL rose 7 3/8 to 111 5/8.
Dell will ship CDs with AOL 4.0 software and 100 free hours to use in the first free month of AOL service along with its Dimension and Insperion desktop and laptop PCs. Next year, the PCs will have AOL already installed in the computers. In return, AOL 4.0 will feature direct links to Dell's ConnectDirect program. The arrangement further enhances the Texas company's position to sell online. Dell has not faced the brunt of the sub-$1000 PC trend, which has wreaked havoc upon its competitors, such as Compaq Computer Corp., since it doesn't make a computer until the order is placed, keeping inventories low.
In related news, Morgan Stanley's Mary Meeker touted AOL to be one of the best bets out of the Web stocks, reported Barron's.