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AOL heads to Japan

AOL plans to introduce a new online service in Japan next month that will provide locally produced news and interactive programming.

America Online (AOL) plans to introduce a new online service in Japan beginning April 15, the company announced today.

The latest of AOL's international rollouts, the Japanese-language service will provide locally produced news and interactive programming and deliver it through a multimedia user interface for about $8 a month for three hours online. Each additional hour will cost about $4, the company said.

AOL hopes to woo Japanese consumers by offering them one free month of service and a total of ten free hours online, the same tactic used by the online service provider to court U.S. customers.

"Our focus is going to be in the consumer market," said Jack Davies, AOL's president of new market development. "We think that is going to be the major growth area in the Japanese market over the next five years."

Davies said AOL has adapted its technology for delivering multimedia content--such as video, audio, graphics, and animation, as well as text--to handle the two-byte character requirements of the Japanese language.

AOL Japan was formed last May when the company entered into a joint venture with the Japanese trading firm Mitsui & Company and publishers of the Tokyo financial newspaper Nihon Keizai Shimbun (Nikkei). AOL holds a 50 percent stake, Mitsui owns 40 percent of the company, and Nikkei owns the remaining 10 percent.

Steve Case, AOL's chairman and chief executive, plans to be on hand for inaugural festivities in Tokyo on April 15. The company, which has spent nearly a year preparing for the rollout, has said publicly that it expects the Japan operation to quickly become AOL's second most important market after the United States.

AOL disclosed today that it has signed up more than 600,000 members for its various international services. The bulk of the members reside in England, France, Germany, and Canada. The company seeks to push the overseas figure past the million-member mark by the end of September, Davies said.

"We are well on the way to achieving that goal," said Davies. AOL claims to have 8 million members worldwide.

In addition to news produced by Nikkei and other local and international sources, AOL Japan will run its own studio to build interactive programming and online communities centered on topics such as sports, computing, romance, and literature, the company said.

The company has set up 30 telephone lines across about two-thirds of Japan for connecting to the Internet at speeds between 14.4 kbps and 33.6 kbps. For accessing the Web, the service will be integrated with Microsoft Internet Explorer.

In an attempt to prevent the kinds of bottlenecks that have created logon problems for U.S. members and chronic headaches for AOL executives, the company said it will provide a toll-free number that members can use from anywhere on the island. However, logging on through the 800 number will carry a surcharge of about $5 an hour, according to Davies.

In related news for the online giant, AOL France, a joint venture of America Online and Bertelsmann, said today it would reach the 50,000 subscriber mark at the end of the month, according to the Reuters news service.

Bertrand Le Ficher, managing director of the company, gave the forecast at a news conference to celebrate the firm's first year of existence.

He gave no financial details. AOL's financial year ends in June. Le Ficher also declined to give further member goals.

"We do not control our own development," he told Reuters, explaining that the growth in AOL members depended to a great extent on personal computer sales.

These were growing in France, he added.

"Actually, it has really taken off since September. We had 10,000 subscribers in July. We will have 50,000 in a week. Given that a large proportion of our subscribers found AOL preinstalled on their computers when they bought them, I see no reason why we would not continue on the trend we've seen since September."

H&R Block's CompuServe (CSRV) has some 80,000 subscribers in France.

"I think that before the end of the year we will be No. 1 in France," Le Ficher noted.

Reuters contributed to this report.