November 22, 1999 5:45 AM PST

Electronic Arts makes Net push with AOL deal

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As part of a major Internet push, Electronic Arts today said it will create and deliver online games and interactive entertainment for America Online properties through its newly formed Internet business division, EA.com.

Redwood City, Calif.-based Electronic Arts, a video game developer and publisher, also announced that its board approved plans to create a new class of common stock, called Electronic Arts B common stock, that will track the performance of the company's new Internet business unit.

AOL said it will purchase 10 percent of the new class of stock and warrants for an additional 5 percent as part of the companies' five-year strategic alliance.

Through the agreement with AOL, Electronic Arts said it will guarantee AOL $81 million and become exclusively responsible for content on AOL's Games Channel and for all game content on AOL brands, including AOL.com, CompuServe, Netcenter and ICQ.

The two companies said the new gaming site, which will be found under the AOL keyword "EA," is slated to launch in the summer of 2000 with a broad offering of products and services for game players, including the ability to access Electronic Arts' proprietary game content, download and play games, obtain game-related information, and join chat rooms to discuss games.

In addition, the site will provide new and current Electronic Arts games as well as original products developed exclusively for AOL members with content ranging from classic games to interactive trivia and popular sports, the companies said.

Electronic Arts said the gaming site with AOL will be operated under its new unit, EA.com, led by the company's CEO, John Riccitiello. The Internet division will also run Electronic Arts' current Web site, which will be relaunched in conjunction with the new AOL gaming site next year.

In related news, Electronic Arts today announced the acquisition of Charlottesville, Va.-based Kesmai, a developer of multiplayer online entertainment and a unit of global media group News Corporation.

Through its purchase of Kesmai, which will become a wholly owned subsidiary of EA.com, Electronic Arts said it has formed a nonexclusive distribution agreement with News Corporation to deliver Fox interactive online games through the company's EA.com network. Financial terms of the deal were not disclosed.

 

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