NEW YORK (CNNfn) - Internet service provider America Online Inc. plans to announce a broad agreement later this week with Japan's wireless titan NTT DoCoMo to jointly develop and market mobile Internet services in Japan and elsewhere, the Asian edition of the Wall Street Journal reported Monday.|
The newspaper, citing sources familiar with the matter, reported that DoCoMo will take a stake of about 43 percent in AOL Japan, making the Japanese wireless firm the largest shareholder.
Under the terms of the agreement, DoCoMo plans to invest $120 million in AOL's Japanese unit and have the right to appoint the chief executive of the company.
U.S. Internet giant AOL on the other hand will pour an additional $100 million into the unit and appoint a chief operating officer. Over the next two years, both companies will invest up to an additional $200 million in AOL Japan.
According to sources close to the deal, DoCoMo's non-cash contributions will give it a 43.3 percent stake in AOL Japan, and reduce AOL's share to 39.3 percent from its current holding of 50 percent.
Japan's trading house Mitsui & Co. and publisher Nihon Keizai Shimbun currently hold 40 percent and 10 percent of AOL Japan, and will hold the remaining 17 percent under the new arrangement.
The accord includes a separate agreement under which AOL and DoCoMo plan to jointly develop mobile Internet services in markets outside of Japan. AOL is planning to merge with Time Warner (TWX: Research, Estimates), the parent of CNNfn.com.
Although the alliance with AOL (AOL: Research, Estimates) is not expected to be a huge contributor to DoCoMo's earnings, the Japanese mobile firm will gain a strong partnership with deep pockets in the U.S., the world's largest telecom market.
Shares of NTT DoCoMo were up 1.63 percent at ¥3.12 million in mid-morning trading Monday in Tokyo.