Digital City's Internet sites offer local information such as restaurant reviews and movie times. The unit also unveiled a service that sends local maps and other content to cellular phones, pagers and other wireless devices connected to the Web.
AOL wants to tap the burgeoning market for local online information because more U.S. residents are using the Internet to help plan their leisure activities. About 54 percent of the $7.7 billion in projected spending for online advertising in 2002 will go to local sites, AOL said, citing research from Jupiter Communications.
"The margins on this business are very, very strong," said Ted Leonsis, president of AOL Interactive properties. "The reason why we're expanding to 200 markets is we can open a city (site) and make it profitable in about six months."
Separately, Digital City signed an agreement today with Imandi.com, an online marketplace that links consumers with local service providers. The companies will offer a co-branded site through Digital City's network of local city guides, giving visitors access to Imandi's more than 200,000 affiliated merchants across the country.
Imandi's technology lets consumers make requests for services such as house painting and pest control and then receive bids from merchants online.
Terms of the deal were not disclosed.
Leonsis said Digital City is profitable, but he wouldn't provide financial details. Rival Ticketmaster Online-CitySearch, which runs about 80 local online guides, lost $121.4 million in 1999.
Digital City will open its new Web sites beginning April 1 for cities including Lincoln, Neb., and Flint, Mich. Previously, it only operated regional online guides for larger cities such as Los Angeles and New York. Its Web site lists the communities served.
Digital City is using MovieFone's movie listings and ticket-purchasing technology and online maps from MapQuest.com, which AOL agreed to buy in December. Last year, Dulles, Va.-based AOL bought MovieFone, which charges a $1.25 per-ticket fee.
News.com's Stefanie Olsen contributed to this report.
Copyright 2000, Bloomberg L.P. All rights reserved.
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