IBM to Offer AOL Software on Its Personal Computers for Consumers

International Business Machines Corp., the world’s largest computer maker, agreed to feature software from No. 1 online service America Online Inc. on its personal computers for consumers, the companies said Tuesday.

The software, which will be installed on IBM’s Aptiva and ThinkPad models, will let IBM users click on an icon to sign up for AOL’s online service, which includes Internet access.

AOL will be the preferred Internet service provider on IBM PCs and will pay IBM a fee for each user that signs up for the online service, said IBM spokeswoman Ellen Reid Smith.

IBM is betting that ties to the world’s most popular online service will attract more buyers to its PCs.

For AOL, the direct link with IBM customers helps it lure more consumers amid rising competition from other Internet-access services.

The AOL software will be customized to feature links to IBM’s Web site when users go online, IBM’s Smith said. The software will also be included with IBM’s PC modems for consumers.

The news helped push up Dulles, Va.-based AOL’s shares $3.88 to close at $89 on the New York Stock Exchange.

Armonk, N.Y.-based IBM’s shares fell $2.25 to close at $110, also on the NYSE.

Separately, AOL said it will work with CyberCash Inc. to help utilities and other merchants send bills and receive payments via the Internet.

Starting in July, consumers in the Washington area will be able to pay routine bills through AOL’s Digital City link. If the pilot project is successful, it could be expanded to 37 other Digital City sites serving AOL subscribers around the U.S.

CyberCash, a Reston, Va.-based start-up, has about 3,000 merchants that use its Internet payments software, and was handling 2 million transactions a month at the end of March. CyberCash developed a “wallet” that lets Internet users securely transmit credit card numbers or electronic checks to online merchants.

CyberCash shares rose 63 cents to close at $14.06 on Nasdaq.