Rumored Deal Could Help AOL, Wal-Mart Reach New Customers

NEW YORK — America Online Inc. may be close to signing a marketing pact with Wal-Mart Stores Inc., in a deal that would link the Internet powerhouse with the world’s biggest retailer.

Speculation of an agreement has circulated on Wall Street this week, and investment firm Salomon Smith Barney said Friday that announcement of a deal was imminent. Both companies declined to comment.

Such a partnership would bring together two corporate giants that are both looking to expand their reach on the Internet.

Aligning with Wal-Mart would enhance AOL’s efforts to increase its subscriber base, which already is nearly 20 million. AOL could tap the tens of millions of customers who shop at Wal-Mart’s more than 3,600 stores worldwide.

Wal-Mart, meanwhile, would get a well-respected technology partner that could help it build and gain exposure for its own site, Walmart.com, which is being redesigned and is expected to relaunch in early 2000.

On its own, the giant retailer is already having online problems. Wal-Mart has warned customers that the company can not guarantee that orders placed now will be delivered in time for Dec. 25. More adept direct merchants, in contrast, are accepting orders as late as Dec. 22.

The foul-up is not expected to have a serious impact on Wal-Mart’s business, however, because the real-world powerhouse does only a minuscule amount of selling online.

Salomon Smith Barney, in a research note issued Friday, cited two scenarios that could come from the partnership.

One is that AOL may help Wal-Mart brand itself as its own Internet service provider. The other is that Wal-Mart would help demonstrate and sell AOL products and services in its stores. Wal-Mart could set up in-store kiosks where shoppers could search and buy from AOL.

On the New York Stock Exchange, AOL jumped $5.25 to close at $91.50, while Wal-Mart gained $1 to $63.25.