Lollapalooza may go online

The Lollapalooza Festival rock tour is near a deal with a new act striving to tap into the youth market — America Online, the nation’s third-largest online computer service.

The deal would give the computer service access to Generation X while fueling Lollapalooza sales with electronic word-of-mouth.

The deal will have the online computer service traveling the country with the festival, providing special interactive Lollapalooza content it is developing.

A formal agreement is expected within a month.

Sources close to the talks are saying that Microsoft co-founder Paul Allen may participate in the tour plans via his newly created Starwave Co.

Starwave develops information and entertainment content for home users of online interactive computer systems. Allen, who acquired 80% of Ticketmaster in November, recently acquired 24.9% of America Online. Signing on to the tour would help to unite his diverse interests under one tent for the duration of the project.

Under the proposed plan, America Online kiosks would nest among the myriad body-piercers, tie-dye T-shirt sellers and hair-weavers who provide the rock tour’s festival atmosphere.

America Online will bring to these booths 50 computers and their national online service, allowing users to access information about the tour and its performers, hear portions of songs and view digitized photos of the various performers on the tour.

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