World Online to Sponsor BAR

Pan-European Internet Service Provider (ISP) World Online said on Friday it had signed a multi-year agreement to sponsor a Formula 1 auto racing team.

The announcement came just days after the company said it would cut back on expensive brand name promotions, but a spokeswoman for the company said the deal is designed to bring in more subscribers.

"We are going to have exclusive Web cams and chats...these partnerships are meant to build up our subscriber base. It's not just branding," spokeswoman Margaret van Kempen told Reuters.

She declined to say how much World Online would pay for the sponsorship, but sources familiar with such arrangements said the price was likely to be about 10 million guilders per year.

World Online said it would become a sponsor of the British American Racing team and would have its logo plastered on the cars' nose, barge boards and rear wing end plates. One source said these were the premier locations for sponsorship, normally fetching the highest prices.

The logo will also appear on the overalls of drivers Jacques Villeneuve and Ricardo Zonta.

World Online will host the team's official Web site.

The firm on Wednesday reported widening losses coupled with slowing growth in subscriptions.

Chairman James Kinsella said on Wednesday the company would stop spending money on brand marketing and would only spend money on marketing when it added subscribers.

Kinsella's predecessor, Nina Brink, had splashed out lavishly on sponsoring major events, including the Tina Turner concert tour. Brink was forced to resign after it emerged that she sold most of her stake prior to the ISP's March IPO at $6 per share, well below the 43 euro IPO price.