Gateway was going to be the OEM for America Online (and/or AOLTW)'s foray into the set-top-box market.
Microsoft had acquired WebTV, which was still a going concern around then, and AOL itself had a pretty take-it-or-leave-it attitude with its side projects (see also: Mozilla), equally happy to use them as leverage with MS as to leverage the products themselves.
So... in the end, AOL managed to continue to be bundled as an 'Online Service' with every Windows installation, especially as Microsoft was attempting to 'crack down' on the crap installed by individual OEMs, in exchange for dropping all these 'threatening' projects, accepting IE as the basis for the AOL browser, etc.
Frankly, this was where the big money was, and Gateway took a gamble (or was optimistic) and wound up screwed. I expect they viewed their Amiga Inc. as the R&D arm for this and future 'media' projects, and when it became clear they weren't going to be viable (and that all 1,000 Amiga users left were only going to spit on the Linux-based, x86 system anyway), they cut their losses, dragged the rapidly obsolescing and underdeveloped Amiga carcass out back to be shot, and bought eMachines, who were essentially producing what had already proved to be the real media terminal of the decade: the cheap commodity PC.*
Reference:
http://www.businessweek.com/1999/99_49/b3658159.htmAOL Anywhere, anyone?
*
'PC' in the generic sense of 'personal computer,' and despite the dreams, AInc's MCC wasn't looking to come out particularly cheap per dollar of revenue generated, or, depending who was deciding what the system would look like that day, particularly 'computery' -- Amino's console/royalty-model idea had to have come from somewhere. The Mac Mini I happen to be typing this on also fulfills that role, but ignoring all the marketing hand-waving, the only functional difference between a boutique design like that and an eMachine the customer was never going to open anyway is the amount of air in the case.
