Telecom Italia Buys AOL Germany’s Internet Access Business

MILAN/NEW YORK, September
18: Time Warner is selling its AOL Internet access business in Germany to
Telecom Italia for 675 million euros.

With this acquisition,
Telecom Italia strengthens its position as a leading broadband access provider
in Europe. The company is already present in Italy, France and Germany, and
with AOL Germany’s business, Telecom Italia will be serving some 9 million
broadband subscribers in Europe.

As of June 2006, AOL
Germany had 1.1 million broadband subscribers and approximately 1.3 million
narrowband subscribers.

The deal is expected to
close within the next four to six months, pending regulatory approval.

“This acquisition marks a
further step in Telecom Italia’s strategy of focusing on broadband services and
content delivery at an international level,” says Riccardo Ruggiero, the CEO of
Telecom Italia. “Since we acquired Hansenet in 2003, our German presence has
gone from strength to strength, confirming the validity of Telecom Italia’s broadband
strategy, and with the AOL co-branding agreement our content offer, as well as
our customer base, grows.”

“This agreement to sell
AOL Germany’s Internet access business marks the latest step in Time Warner’s
strategy of focusing on our core assets to drive profitable growth,” says Dick
Parsons, the chairman and CEO of Time Warner. “Our partnership with Telecom
Italia advances AOL's worldwide transition from a business built primarily on
providing Internet access to an advertising-supported business model. We look
forward to AOL continuing to grow its online advertising business—both in
the U.S. and overseas—to help create enhanced value for our
shareholders.”

"AOL's partnership
with Telecom Italia highlights the value of the Internet access business we
have built in Germany, as well as our programming assets and advertising
network,” adds Jon Miller, the chairman and CEO of AOL. “AOL's content and
features will enhance Telecom Italia's Internet service, and the scale of our
advertising network in Germany—Europe's second-largest online
market—will increase. This continues our strong momentum in building our
worldwide advertising business and serving a large and highly engaged
audience."

Under the terms of the
five-year partnership, AOL will design, host and operate audience services for
Telecom Italia’s entire residential Internet access customer base in Germany.
AOL will be responsible for all online advertising sales for the co-branded
audience services. The financial terms of the audience services partnership
were not disclosed.