Coke, AOL in Net marketing alliance


1:49 AM ET May 3, 2000

By CBS MarketWatch

ATLANTA -- Coca Cola Co. (KO: news, msgs) is expected to announce Wednesday the soft-drink company's first foray into Internet marketing, with a two-year strategic alliance with America Online (AOL: news, msgs) valued at about $64 million. The deal, which the two companies signed Tuesday and which provides for the development of online and offline marketing programs, is part of a push by AOL to align itself with prominent companies from old-line industries such as consumer packaged goods, automobiles and retailing. It will bring Coke much-needed visibility on the Internet and help its efforts to become a more effective local marketer, while providing AOL the offline-promotional clout it urgently needs as it seeks to capture mass-market subscribers. Coke will pay AOL $24 million for access to AOL services, according to people close to the companies. The two companies will then each contribute $20 million over the two years in marketing support, these people said. The deal may be extended for a third year, they added. Coke's chief marketing officer, Stephen Jones, said the alliance's marketing initiatives would focus on movies, music and sports, and promotions of brands such as AOL's Moviefone and Coke's sponsorship of the 2000 Olympic Games. He said the two sides would explore ways of reaching consumers, such as "dialoguing" with consumers over the Internet, or offering interactive in-store promotions.

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