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AOL, DoCoMo dissolve joint venture

TOKYO-Struggling Internet company America Online Inc. and Japanese wireless data giant NTT DoCoMo Inc. announced they dissolved their widely touted joint venture, once heralded as way to promote “fixed-mobile convergence.”

Terms of the deal were not disclosed, and neither company was immediately available for comment. However, Reuters reported that DoCoMo sold its 43-percent stake in the joint venture back to AOL for a paltry $4 million-far less than the $100 million it paid in 2000 to form the joint venture.

Mitsui & Co. Ltd., Nihon Keizai Shimbun Inc. and Nikkei Business Publications Inc. announced they also sold their stakes in the joint venture back to AOL. The Japanese media and trading companies combined owned about 15 percent of the joint venture.

The move comes at a difficult time for both companies. Once the darling of the Internet bubble, AOL has been suffering from the onslaught of high-speed DSL and cable Internet providers. Indeed, AOL Time Warner recently voted to drop AOL from the company’s name, just a few years after the merger between the ISP and the media giant.

DoCoMo, on the other hand, has been forced to write off more than $12 billion in overseas investments. The carrier has been working to promote W-CDMA technology and its i-mode wireless data platform through major investments in international carriers, including AT&T Wireless Services Inc. But DoCoMo has been forced to drastically reduce the value of those investments due to declining stock prices and the telecommunications downturn. Its evacuation from its AOL joint venture is just the latest in a series of retractions.

Although lauded as a major event, the formation of the DoCoMo/AOL venture included few specifics. The companies promised to work together to cross-promote AOL’s Japanese Internet service provider business with DoCoMo’s i-mode wireless data service. The companies also pledged to offer AOL e-mail and content to DoCoMo’s subscribers. However, the companies made little news following the announcement.

“Part of the reason was that the parent company AOL was only focused on the U.S. market,” Takashi Yamakawa, head of the DoCoMo/AOL joint venture, told Reuters. “They didn’t care about Japan operations because the U.S. business was growing so rapidly.”

The DoCoMo/AOL joint venture is not the only casualty of the meeting of wireless and the Internet. Portals such as Vizzavi, the $1.6 billion venture between European carrier Vodafone Group plc and media company Vivendi Universal, have also faded from the limelight.

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