Gateway, the computer manufacturer, is expected to complete a European sales and distribution agreement with America Online (AOL), the world's biggest Internet service provider with 18 million subscribers. It follows the $800 million (€741 million) deal that the Irish subsidiary's US parent concluded with AOL in the US yesterday.
Mr Mike Maloney, managing director of Gateway's Irish operations in Dublin where 1,700 people are employed, said he expected the European deal, which would follow "in the context of" the US one, to be made by the end of the year. Gateway's Dublin facility is the company's European manufacturing centre.
AOL announced it would invest $800 million over two years in Gateway to combine sales and distribution channels for the marketing of their hardware, software and Internet content. AOL employs 500 people in the State, in a joint venture with Bertelsmann, the German media group.
As part of the agreement, Gateway will invest $180 million in AOL stock and commit $85 million to market its software and products on the AOL network. In addition, the AOL service "will be featured and aggressively marketed" on all Gateway personal computers, according to AOL.
Meanwhile, Gateway has announced a 40 per cent increase in after-tax profits to $113.2 million (€105 million) for the third quarter based on strong back-to-school sales for consumer units and strong performances in Europe and Asia-Pacific. Sales increased by 20 per cent to $2.18 billion and earnings per share increased by 38 per cent to 35 cents.
Gateway's president, Mr Jeffrey Weitzen, said of the AOL agreement that it would "drive out complexity and simplify the Internet".
