STAMFORD, Conn. (AP) _ Xerox Corp. and Compaq Computer Corp. on Tuesday announced an alliance to jointly market Xerox desktop printers as part of a Xerox effort to target the small and home office markets.

The Stamford-based Xerox also said it would spent $200 million on a marketing and advertising campaign to support inkjet products.

Executives of the two companies said the Houston-based Compaq will begin offering Xerox inkjet printers and multifunction products bundled with its personal computers.

The move is part of a broader strategic alliance that includes a joint focus on small and medium-sized businesses.

Compaq will bundle several Xerox personal products, including the new M Series color inkjet products. Each bundle will include a Compaq PC, monitor and a Xerox product at a cost from under $900 to about $2,000. Bundles will be offered through Compaq's telebusiness operations, Web site, resellers and catalogs.

Xerox also said it plans to launch the most aggressive worldwide marketing and advertising campaign in its history.

The campaign features the ``Blue Dog'' image created by Louisiana artist George Rodrigue. Print, television, radio, outdoor and online advertising using images of the Cajun canine will promote ``a smarter breed of inkjet printers.''

The announcements came less than two weeks after Xerox announced that its second-quarter earnings would be well below Wall Street expectations.

The company said that a mismanaged reorganization of its sales force, coming at a time when competitors were bringing out new products, continues to interfere with sales of its most profitable products.

Problems in its Mexican market have also been a drag on earnings. The company said it is doing an internal investigation related to problems with bad debt.

Shares of Xerox fell 68.75 cents to $19.125 in trading on the New York Stock Exchange, where shares of Compaq rose 25 cents to $27.625.