AOL Gains on Sony PlayStation Pact

AOL Time Warner (NYSE: AOL) picked up 17 U.S. cents to $51.77 in morning trading Tuesday, following news of a deal to provide America Online services over Sony PlayStation 2 entertainment consoles.

AOL said it will work with Sony (NYSE: SNE) to develop "a new class of Internet-enabled entertainment," incorporating popular AOL features like instant messaging, chat and e-mail into the PlayStation systems.

Consumers will also be able to use a network adapter for Internet-enabled games and entertainment.

Financial terms of the deal were not disclosed.

The agreement targets AOL's more than 29 million members and Sony's 30 million-plus PlayStation users. The companies said they will look into other opportunities, including broadband technologies and the development of a Netscape browser for the PlayStation 2.

Sony and AOL are "ideal partners," Sony Computer Entertainment president and chief executive officer Ken Kutaragi said.

"With AOL by our side, Sony Computer Entertainment will begin to provide the world's content creators access to a new community for digital entertainment and distribution," Kutaragi said. "Just as PlayStation 2 ushered in a new era of computer entertainment, we are now escalating the evolution of great gaming experiences into what will become a highly interactive, real-time broadband network environment."

AOL members, meanwhile, will get "another exciting way to connect" to the Internet, said America Online chairman and chief executive officer Barry Schuler.

By the end of the year, the companies said, consumers will have access to new products to allow them to take advantage of the collaboration. AOL features will also be incorporated into PlayStation 2 software development kits for content developers.