Dixons has profited from the Freeserve link

The retailer has agreed to help market AOL Time Warner's internet access service instead from February next year, AOL said on Monday.

The agreement will initially only apply to AOL's dial-up service, as the retailer is contracted to promote Freeserve's broadband offering until February 2005.

The Reuters news agency reported that AOL clinched the deal after seeing off Freeserve in a tense bidding war.

Reuters reported that the new agreement will run for five years, and is worth tens of millions of pounds, citing unnamed sources.

Separate ways

The AOL deal marks a final parting of the ways between Dixons and Freeserve, ending one of the most high-profile partnerships of the dot.com era.

Dixons set up Freeserve in 1998, and has been promoting it in its Dixons, Curry's and PC World stores ever since.

It was partially floated on the stock market in 1999, and later briefly entered the FTSE 100 index with a market capitalisation of �8bn, more than Dixons itself.

The ISP was sold to French internet service provider Wanadoo, part-owned by France Telecom, for about �1.6bn in December 2000.