AOL Announces Acquisition of MusicNow

Online music fans who love digital music have a new place to 'tunein' to discover, sample and buy music on the web after America Online,Inc., today announced that it has acquired the business of a digitalmusic subscription company called MusicNow LLC,(http://www.musicnow.com).

The agreement was signed September 27th and closed early thisweek. Financial terms of the deal were not disclosed. The company waspreviously held by Circuit City Stores, Inc., of Richmond, Virginia.

AOL also announced that a broad public preview of the newweb-based digital music service is now available(http://www.aolmusicnow.com). AOL will be gradually upgrading currentMusicNet@AOL subscribers to the new service, called "AOL Music Now".

Founded as "FullAudio" in 1999 and purchased by Circuit City in2004, MusicNow will continue to be based in Chicago, Illinois. AOLMusic Now will operate as a stand alone, wholly-owned subsidiary ofAOL Premium Services LLC, a subsidiary of AOL in the Digital Servicesbusiness unit. The company's 40 employees, including President GaryCohen, will report to Amit Shafrir, President, AOL Premium Services,LLC; and Ed Fish, Senior Vice President and General Manager, AOLPremium & Subscription Services.

"The MusicNow transaction allows us to superserve our AOL membersand expanding web audience with a truly best-in-class, full-service,digital music platform - giving us the opportunity to offer anunparalleled music service," said Mr. Fish. "Combined with leadingprogramming on AOL Music, the easy-to-use features for music browsing,discovering, sharing, and purchasing of MusicNow provides a new levelof customization and personalization of online music. AOL's users havebeen asking for these next-generation features to be a part of theirmusic experience - and AOL Music Now will deliver them."

"We're thrilled to join AOL," said Gary Cohen, President ofMusicNow. "Over the past six years, MusicNow has focused on buildingan easy-to-use service of unprecedented accessibility that delivers ahighly personalized experience. The goal now is to become the numberone music service. With AOL's entertainment properties, scale, andmarketing opportunities, we're confident we'll get there. It's apowerful opportunity."

Representing the next generation of digital music services, AOLMusic Now will provide visitors with the option to browse and purchasemusic on an a la carte ($.99 per track) or subscription basis from anyInternet-connected PC, without downloading separate media playersoftware. Subscriptions to the new service will be available for $9.95per month for unlimited streaming and downloading to a computer, or$14.95 for unlimited streaming and downloading to a computer and any'PlayForSure' compatible portable music device. Songs can be managedwith a Windows Media Player, or compatible player.

The AOL Music Now service will also offer unique personalizationfeatures, such as daily custom playlists and community features, suchas the ability to view and share music profiles with other visitors.The service will be integrated with the AOL.com portal(http://www.aol.com) and AOL Music (http://www.aolmusic.com).

MusicNow carries a complete digital music collection of over onemillion songs from the four major music labels - EMI, Sony/BMG,Universal Music Group, and the Warner Music Group. It has also beensuccessful at building relationships with an expanding list ofindependent labels -- including V2, Rounder, Epitaph, Tommy Boy,Roadrunner, Blue Note, The Orchard, and Astralwerks.

"The acquisition of MusicNow, combined with the launch of the newAOL Music Now service, is yet another powerful milestone in a year ofnotable milestones and pioneering accomplishments by the AOL Musicbrand," said Bill Wilson, Senior Vice President of Programming forAOL. "From the record-breaking broadcasts of the Live 8 concerts, tothe launch of XM Satellite Radio on AOL Radio, to our newest effortsthrough the Network Live series of concerts - online consumers andmusic fans can tune in anytime, anywhere, to experience, discover, andenjoy the very best and latest in music."

During the current AOL Music Now preview period, existingsubscribers to both the MusicNow and the MusicNet@AOL services will benotified via email that they will be upgraded to the new AOL Music Nowservice in the coming months. Subscribers to each of these serviceswill maintain their current, respective price plans under AOL MusicNow. New subscribers to AOL Music Now can select from one of two priceplans ($9.95/month or $14.95/month).

MusicNow, LLC is AOL Inc.'s fourth announced corporate acquisitionin 2005 - following the acquisitions of Weblogs, Inc. in September,and Xdrive, Inc. and Wildseed, Ltd. in August.

For more on MusicNow, please visit (http://musicnow.com).MusicNow and the MusicNow corporate logo are trademarks of MusicNow,LLC.

About America Online, Inc.

America Online, Inc. is a wholly owned subsidiary of Time WarnerInc. (NYSE:TWX). Based in Dulles, Virginia, America Online is theworld's leader in interactive services, Web brands, Internettechnologies and e-commerce services.