After the successful ICML~97 workshop we submitted a follow up proposal for the ICML-98. We got the request to make it a joined AAAI/ICML workshop, which we gladly accepted. This years workshop on the application of machine learning aims at proceeding from the poir~t where last years workshop ended. The workshops program reflects the continuing progress that is made in the field and which initiates an increasing focus on methodological aspects rather than. technical ones. The workshop contains papers that evaluate "lessons learned" from practical-projects , as well as methodological concerns about machine learning technologies in different paradigms.