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AOL to launch in Hong Kong

America Online forges an alliance with China Internet to offer its online service to Hong Kong consumers.

America Online (AOL) said today it forged an alliance with Hong Kong-based China Internet Corporation (CIC) to offer its online service to Hong Kong consumers within the next year, extending its global reach.

AOL's Hong Kong service will be built in Chinese and English, with most of the local content coming from China Internet. CIC also will provide networking services, marketing, customer service, and local billing.

CIC is known for creating China Wide Web, an online system in China, and it already has partnerships with Netscape Communications and PointCast. For its part, AOL will provide host services, as well as training and programming support.

Like many U.S. online services, Internet service providers, and search companies, AOL has been on a worldwide expansion binge. Many foreign countries provide faster online growth rates than the United States. AOL already operates services in Canada, France, Germany, Japan, and the United Kingdom, and it plans to add Australia to the list later this year.

Analysts say AOL's recently completed buyout of CompuServe's consumer service will only strengthen its position on other continents, such as Europe. AOL chief executive Steve Case reiterated that in a call with analysts today to report the company's earnings.

"Hong Kong is a highly literate and connected society and CIC is a strong and well-positioned partner," making it an "ideal" international market for AOL, Jack Davies, president of AOL International, said in a statement.

AOL faces stiff competition as it expands abroad, however, from the likes of Microsoft Network, Yahoo, and Excite, among others. Today, for example, Excite and Netscape announced the launch of a free U.K. Internet guide with a group of content partners, including Conde Nast and Thomas Cook. The service, called Netscape Guide by Excite, is already available in German and Japanese markets.

In addition, American companies have to figure out ways to make their services attractive to other cultures, which is not an easy task.

Senior writer Janet Kornblum contributed to this report.