Wal-Mart to offer Internet service

Bloomberg News Service

FAYETTEVILLE, Ark. — Wal-Mart Stores Inc. will offer an Internet-access service at less than $10 a month to help more customers get on line and onto the largest retailer's shopping site.

The service, a partnership with AOL Time Warner Inc.'s America Online subsidiary, will be called Wal-Mart Connect and will be available in a few months. It will include instant messaging, Wal-Mart.com Chief Executive Jeanne Jackson said at the retailer's annual meeting in Fayetteville, Ark.

America Online plans to increase its monthly fee in July by about 9 percent to $23.90, the service's first price increase in three years. America Online and Wal-Mart agreed to offer a low- cost Internet service in 1999 as Web companies such as Yahoo! Inc. sought contracts from retailers to compete with free or inexpensive rivals, many of which have since shut down.

"The Internet is already in a lot of homes," said CIBC World Markets analyst John Corcoran, who has a "strong buy" rating on AOL Time Warner shares. "It's not the first time a big retailer tried to take this approach, and (BlueLight) wasn't that successful."

Kmart Corp. started BlueLight LLC as a low-cost Internet service in 1999 with Spinway Inc., an online service. Kmart last year bought some of Spinway's assets to keep the service running when it closed after failing to raise enough venture-capital funding.

Wal-Mart and America Online will create a low-price, customized version of AOL's CompuServe Web service, America Online spokeswoman Wendy Goldberg said. The regular cost for CompuServe is $19.95 a month for unlimited service and $9.95 a month for 20 hours of connection time.