updated 5/17/2004 9:54:32 AM ET 2004-05-17T13:54:32

America Online Inc. is withdrawing from Japan, selling its Internet service business to Tokyo-based eAccess Ltd. for about 2.1 billion yen ($18.6 million), the Japanese company said Monday.

eAccess, which supplies Internet service providers with high-speed access to the Web, said it will hire most of AOL Japan’s 200 employees.

The deal is set to be finalized on June 30 following shareholders’ approval, eAccess said in a statement.

The withdrawal signals an end of operations in Japan by AOL, the world’s largest Internet service provider. AOL is part of the Time Warner Inc. media conglomerate.

AOL launched its Japanese unit in 1996 with NTT DoCoMo., the country’s largest cellular telephone operator, in hopes of integrating AOL’s services with Internet-savvy mobile phones. But NTT DoCoMo pulled out last December because it was unable to attract customers.

For the year ended in December, AOL Japan booked a group net profit of 828 million yen ($7.3 million) on sales of 9.737 billion yen ($86.1 million). Its operating profit stood at 1.437 billion ($12.7 million), eAccess said.

The financial impact of the deal on eAccess’ earnings will be calculated after June 30, eAccess added. The company’s shares closed down 7 percent Monday.

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