XM Satellite Radio is teaming with AOL on a co-branded online rad...

subscribers and AOL’s 22 million U.S. members is seen by analysts mainly as a marketing deal. But in the long run it could boost XM’s Internet presence and pave the way for an XM foray into the cellphone market, they said. “We do not expect wireless audio services to have the same quality and/or demand as audio broadcast from XM’s satellites -- nonetheless, XM is now positioned to participate in the evolution of wireless offerings,” Banc of America Securities analysts said. Users can anticipate: (1) A free Web radio service featuring 20 XM stations plus 130 AOL Radio stations. (2) An improved version of AOL’s premium radio service with over 70 XM stations and 130- plus AOL Radio original and 3rd party stations. XM also will integrate some AOL original programs such as Radio KOL, AOL Music Sessions and AOL Music Live programming into its satellite radio service. Officials said the companies will collaborate on new online and satellite programs and services. AOL Chmn. Jon Miller called the deal “a giant step in digital media.” XM announced Mon. a long-term agreement with Air America Radio. Beginning in May, XM’s America Left channel will be renamed Air America Radio. The channel will air an expanded line-up of Air America programs, including the new Springer on the Radio hosted by Jerry Springer, the upcoming Rachel Maddow Show and others. XM’s Air America Radio channel will continue to run shows now on America Left, including The Ed Shultz Show and The Alan Colmes Show. Bear Stearns analysts said they believe the radio market remains primarily in vehicles and that online radio likely will remain a niche service. But this joint service offers XM the advantages of generating a buzz across AOL’s base and allowing the broadcaster to compete directly against online radio services often cited as a threat. Bear Stearns reiterated its $45 2005 year-end price target and its “outperform” rating on XM’s stock.