AOL Forges Microsoft Alliance

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DULLES, Va.: He swallowed CompuServe, now the America Online CEO, Steve Case, is forging an alliance with the Dark Side. Just a week after the surprise announcement that AOL was taking over its top rival, TIME magazine reports Case is about to unveil a deal with Microsoft. The partnership include everything from licensing the online magazine Slate, which will appear on America Online this fall, to becoming part of Microsoft's "Active Desktop," which delivers information to Windows computers using new Microsoft Internet technology.

Despite packing this brand-name punch, Case fears AOL could end up in the shadows of better-recognized competitors as the Web starts showing up on more mainstream platforms like TV sets. So he's trying to keep AOL flexible enough for the next big technology shift. "Even though we've been at it for a decade, this is like the second inning in terms of the development of this medium," Case tells TIME. The online business, he says, is about to become "the most competitive market in the world."