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Although financial terms of the deal were not disclosed, AOL said it will make a minority investment in Emachines.
The companies said that software from AOL and its subsidiary unit CompuServe will be integrated into all Emachines personal computers and will be accessible through icons prominently featured on the emachines desktop.
The move comes at a time when an increasing number of computer makers, including Dell and Gateway, are adding Internet service to their offerings to offset sagging margins as PC prices continue to tumble.
Other services such as Gobi, DirectWeb, and Enchilada are offering free PCs with Internet service at monthly rates as low as $19.95.
Analysts note that many computer users are becoming less interested in word-processing or spreadsheet applications and more interested in easy access to the Net with a machine that can handle that task.
"AOL is trying go even more mass market than they currently are," said Zia Wigder, an analyst at Jupiter Communications. "[AOL] is trying to make this not just a medium for the technically savvy, and is trying to bring those who aren't online today to come online in the simplest way possible."
Emachines and AOL's CompuServe also will offer a limited-time retail promotion beginning early this summer, giving consumers who sign up for three-year memberships a rebate of $400 on purchase price of three models of Emachines computers.
"AOL's multibrand strategy is designed to meet consumers' needs across a wide range of Internet brands and services," AOL marketing president Jan Brandt said in a statement. "We're looking forward to bringing this range of services to the growing value-oriented market attracted to Emachines' very competitive pricing and features."
