America Online Deal Points to Free PCs

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Remember the "Happy Days" episode when Richie's mom ran the hardware store sale? At first Dad was horrified that Marion was selling brushes and rollers below cost; then it turned out she made a killing on the paint. Yesterday America Online announced an investment in the low-cost PC maker emachines that will kick off with a Marion-style summer promotion -- buy a $399 emachines computer and get a $400 rebate on Internet access.

That's essentially how the mobile phone business works right now -- the cost of phone hardware is subsidized by service providers. But will America Online's dominant, 17 million-strong ISP brand translate to hardware? MORE >>