We are the Internet, said Robert Shenk, group director of financial services for America Online Inc.

With 47 million monthly visitors to its Web site and proprietary network, AOL surely comes close to living up to such a lofty claim.

Its personal finance channel, with nearly 10 million monthly users, is the Web's most popular site for financial news and services, according to Media Metrix Inc. of New York. It is also the most frequently visited area on AOL.

Those numbers put AOL in a strong position -- rivaled by only a few elite brands -- to call a lot of shots. So far, its agenda in the area of personal finance has included forming partnerships with financial institutions -- but it does not always have to be so.

We're a multibrand company that tightly integrates various brands together, Mr. Shenk said.

But if we think that offering financial services independently of our bank partners would improve the lives of our customers, then we'd seriously consider it.

AOL is moving in every direction to be everything to everybody, said Ulrich Weal, senior technology analyst at Friedman, Billings, Ramsey in Arlington, Va. The last chapter has yet to be written.

AOL set a pattern for financial institution partnerships with portals. In July 1998, four discount brokerages -- Ameritrade, DLJ Direct, E-Trade, and Waterhouse Securities -- signed two-year, $25 million advertising commitments in return for premier-provider status.

Charles Schwab & Co. and Fidelity Investments have opted not to renew their original arrangements.

Fidelity formed a partnership with AOL in June 1995 to open an Online Investor Center, but it decided to dissolve that relationship in 1997.

Clearly, our strategy as it relates to on-line services has significantly evolved, said a spokeswoman for Fidelity.

Our alliance strategies have changed, as have the companies we had partnerships with.

AOL's initial plunge nonetheless touched off a proliferation of such partnering. Netscape Communications Corp., which itself merged into AOL in March, refined the concept with a $30 million pay-for-performance deal with Citibank.

The year-old arrangement requires the Citigroup Inc. unit to pay as long as certain goals, such as customer account sign-ups, are achieved through Netscape's NetCenter channel, which has 13 million registered users.

In February, AOL signed its largest Internet marketing partnership, a $500 million, five-year deal with Bank One Corp.'s credit card subsidiary, First USA. It gives the latter exclusive advertising rights and lets customers pay their credit card bills on AOL's site.

Mr. Shenk described these revenue streams as fabulous, in our favor, and lucrative.

AOL likes to flex its muscles and extract up-front payments, said Mr. Weil, but it will also enter into revenue-sharing arrangements. It wants to build a big brand, be it in banking or retail.

In its early stages, the Dulles, Va., company derived most of its revenue from subscriptions and hourly Internet fees. Besides the cobranding relationships, AOL now also sells advertising, does merchandising, and is exploring ways to earn further transaction revenue, Mr. Shenk said.

The company had $2.6 billion of total revenue in 1998, up from $1.7 billion in 1997 and $1 billion in 1996.

An alliance announced last month with Royal Bank of Canada could be especially far-reaching.

The Toronto bank announced it would take a 20% equity stake in AOL Canada Inc. for $60 million and that it and its U.S. subsidiaries, Security First Network Bank and Bull & Bear Securities, would spend $7.5 million to do interactive marketing with AOL.

Royal Bank and AOL Canada said in a statement they would cobrand and bundle services, and collaborate on a range of e-commerce initiatives.

AOL has plans to incorporate a digital wallet into its Shop AOL program and it is ready to roll out Quick Checkout, a wallet that permits one-click shopping on the Internet, Mr. Shenk said.

Bankers have had their eye on virtual wallets, too, and wonder if AOL or others might ace them out in that area. But AOL may be in a better position to sell wallets, which streamline the payment process at the point a transaction is initiated, to a mass market.

Electronic commerce, said Mr. Shenk, is all about simplifying the way people shop, and that includes using an electronic wallet.

But observers said they do not expect AOL to go so far as offering banking services on its own.

It's not the way AOL looks at the world, Mr. Weil said. It offers an intriguing, dominant platform for people to display their wares. Banking is too specialized, too regulated. It wouldn't want to get into it on its own.

David Alschuler, vice president of e-business at the Aberdeen Group, a research firm in Boston, said AOL also does not possess the physical presence and historical relationships that are important attributes for financial relationships.

Its strengths are in aggregation of content and audience and its understanding of intuitive, simple, and appealing interfaces.

Yet becoming a bank is not out of the question.

An 'AOL Bank' could choose to have its servers sit at Home Account Network with its products served by Home Account while AOL managed the customer interface, said Lee Spirer, principal at Booz-Allen & Hamilton in New York. Home Account Network, a software firm, is his example of a back-office support source that AOL could rely on.

A downside could be the endangering of the halo effect of the AOL brand, Mr. Spirer said, because financial services is generally not a feel-good experience.

AOL first got close to the banking experience in August 1996 with BankNow, an on-line version of Intuit Inc.'s popular Quicken personal financial management software.

The relationship was extended in February 1998 in a $30-million deal that makes Intuit the primary source of financial information at AOL.com, where cobranded versions of Quicken.com and Quickenmortgage.com are also offered.

In 1996, AOL also entered into relationships with Bank One, Bank of America Corp., Citigroup, Union Bank of California, and Wells Fargo & Co.

Users see an established bank brand and use us as the primary conduit, Mr. Shenk said. We're guaranteeing eyeballs.

Though the major bank partners are forking over less money than the brokerages, the amount still is significant, Mr. Shenk said.

AOL probably will not add many more bank partners, he said. We've reached a basic level of maturity.

This does not mean that AOL will quit adding to its lineup of financial services. The company particularly has its eye on electronic bill payment and presentment, Mr. Shenk said.

In May, AOL developed a loan center that lets users apply for home equity loans from Associates First Capital Corp. of Dallas.

The center also has loan calculators from Financenter Inc., loan rate information from bankrate.com, and mortgage information from QuickenMortgage.com and Countrywide Credit Industries.

In July, AOL signed a multiyear, multimillion-dollar marketing and electronic commerce alliance with iOwn Inc., making that two-year-old San Francisco company the exclusive provider of mortgage aggregation services on AOL's NetCenter and Digital City sites. A consumer can shop for mortgages from 25 national and regional lenders and then apply and qualify on-line.

AOL plans to add bank research from Gomez Advisers Inc. of Concord, Mass.

AOL's five-year-old personal finance channel continues to evolve. At first it offered stock quotes, personal portfolios, news from Reuters and The Associated Press, charts, advice, and information from its Web site, and Motley Fool service, in which AOL was an investor.

It was much simpler then than it is today, Mr. Shenk said.

He was the first employee in a division that has since grown to 17 full-time staff and 40 more in support functions. Though he had no prior financial services experience, Mr. Shenk, 33, said he is a passionate individual investor.... Financial services is a great category.

The personal finance channel was one of many conceived by AOL to draw users in.

Since its founding in 1985 by chairman, president, and chief executive officer Stephen M. Case, 40, AOL has aimed to appeal to and grow with novice personal computer users. It acts as an Internet service provider, delivers e-mail, and provides forums for groups of people with common interests.

The philosophy has attracted it 17 million subscriber accounts and a ranking by Media Metrix as the No. 1 site in consumer loyalty. AOL lays claim to roughly 33% of all U.S. Internet traffic.

The personal finance channel, which supports tens of millions of portfolios, has dealt with a peak of 200 million stock-quote requests in one day and can handle one million simultaneous users, Mr. Shenk said.

AOL is doing what it can to exploit more opportunities in the financial services arena.

In April, it formed the Sun-Netscape alliance with Sun Microsystems Inc. to jointly develop products for electronic commerce.

The alliance recently announced it would work with Enterprise Engineering Inc. to build and market a service that would let financial institutions offer their customers on-line trading. Netscape's NetCenter will be used to combine content such as news, weather, and mail with custom financial applications.

The aim is to create a specialized portal. Prudential Insurance Co. of America has signed up for the service.

Sun Microsystems, and by extension its alliance with Netscape, is also playing a role in the development of the Exchange, a bill presentment network being put together by Chase Manhattan Corp., First Union Corp., and Wells Fargo.

With cash reserves of $2.6 billion and a healthy stock market valuation, AOL has been able to push into new areas.

It has made several acquisitions in recent years, including the multimedia company Medior Inc. in 1995; Actra Business Systems in 1997; Compuserve Inc., an on-line service with two million members, in January 1998; and the $10.2 billion acquisition of Netscape.

The AOL vision is to offer Internet access wherever the consumer wants it, whether at desktops or palmtops. It is designing AOL-TV for delivery to interactive set-top boxes.

Mr. Shenk believes aggregators like AOL can be more objective than banks in offering financial services.

Financial institutions have a vested interest in their products, but consumers might want best of breed, he said.

We'll continue to aggregate valuable content for hyperactive traders who want convenient access to their financial information, he added.

With us, they can get it all from one source.

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