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AOL, ADP eye small firms
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August 2, 2000: 6:22 p.m. ET
ADP payroll services to be on AOL Web sites; targets small businesses
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NEW YORK (CNNfn) - Automatic Data Processing Inc., the big payroll company, and America Online are targeting small companies in a new marketing push.
Under terms of a multiyear agreement announced Wednesday, leading online service provider AOL (AOL: Research, Estimates) will make ADP (AUD: Research, Estimates) services available through its Web sites, not only on its flagship America Online service but also on AOL.com, CompuServe and Netscape Netcenter.
ADP's small-business customers will be able to submit their payroll information for processing using AOL, while prospective customers will be able to shop for ADP services using a "Solution Profiler" software program to assess their financial needs, getting real-time, customized price quotes, said Brad Smith, vice president and general manager of ADP's Emerging Business Services unit.
The potential market is 34 million small businesses, including 24 million firms that are based in homes, Smith said. ADP has 370,000 small-business clients now.
He declined to project the financial impact on ADT, but said, "This is such uncharted territory for us." Nor would he disclose the financial arrangement with AOL, except to say the multiyear deal would include both a fixed baseline cost plus a revenue sharing component if the arrangement meets certain performance objectives.
ADP stock gained 1-1/2 Tuesday to close at 52 in New York Stock Exchange trading. AOL fell 1/16 to end at 52-3/16.
America Online has an agreement to acquire Time Warner (TWX: Research, Estimates), parent company of CNNfn. 
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