Compaq to give AOL exclusive spot on Windows XP PCs

America Online Inc. (AOL) will get a prime spot on consumer PCs running Windows XP sold by Compaq Computer Corp., while Microsoft Corp.’s MSN Internet access service will be limited to exposure in the “start menu,” Compaq said Friday.

AOL and AOL-owned CompuServe Interactive Services Inc. will be the only Internet services with an icon on the Windows XP desktop in Compaq computers, said Kevin Kyle, director of marketing for access services at Compaq, in an interview with the IDG News Service.

Additionally, the services will be advertised on a special screen that consumers see when they first start a new Compaq Presario PC or notebook, Kyle said.

Microsoft’s MSN will still be part of the Windows XP start menu, simply because Compaq isn’t allowed to remove the link, Kyle said. Compaq would remove it, if it could, he said.

“The start menu is part of Windows XP and is partially controlled by Microsoft. We can’t remove MSN. We would pull it if we were allowed to, but we don’t expect that power to come to us anytime soon. AOL negotiates and pays for its position, while Microsoft dictates it,” Kyle said.

The move makes Compaq, the world’s second largest PC maker, one of the first to act on a relaxing of the licensing rules for Windows announced by Microsoft in early July. The software giant gave original equipment manufacturers (OEMs), such as Compaq, more flexibility to configure Windows, a concession after a ruling by a U.S. appeals court in late June [see story – Microsoft loosens OEM licensing].

“We have been given the freedom to add icons to the desktop of Windows XP and we are adding AOL and CompuServe. Previously, as part of XP, Microsoft pulled all icons off the desktop and actually had an application to clean the desktop,” Kyle said.

The Windows XP start menu has six spots, three of which can be filled by the PC vendor. Because of the limited number of spots, Compaq is only adding AOL and not CompuServe or any other ISP (Internet service provider), according to Kyle.

The arrangement with Compaq is part of AOL’s continued campaign to gain control of as many desktops as it can. Talks between AOL and Microsoft over whether to include a link to AOL on the Windows XP desktop collapsed in June [see story – Microsoft, AOL can’t agree on Windows XP deal].

AOL is now offering to pay PC makers in order to win customers for its service. AOL wants PC makers to place advertisements on the desktops of computers based on the upcoming Windows XP operating system and will pay US$35 per customer that signs up for AOL’s Internet service, The Washington Post newspaper reported Thursday.

The deal between AOL and Compaq is limited to the U.S. market, according to Jolanda Peek, a spokeswoman for Compaq in the Netherlands. No announcement is being made on what, if any, ISPs Compaq will promote on its PCs outside of the United States, she said.

The release of Windows XP is scheduled for October 25.

Microsoft, in Mississauga, Ont., can be reached at AOL Time Warner, in New York, can be reached at