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Technology Stocks : America On-Line: will it survive ...?
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To: Sam who wrote (10535)7/1/1998 6:56:00 PM
From: Jason Cogan  Read Replies (1) of 13594
 
Sam:

I don't mean to add to the "bear hype", although I am in the camp that AOL does a much better job of managing their stock price rather than their business and competitive landscape.

<<Financial terms were not disclosed, but the companies said that the deal marks the single largest commitment to the interactive medium by any packaged goods marketer.>>

Regarding Unilever, I think it is significant that no financial deals were disclosed. Packaged goods companies, such as P&G, Coke, J&J, have been very slow to bring any significant advertising dollars to cyberspace. Most of the deals have been by speculative start-ups, such as Tele-Save. When you're playing with borrowed money and inflated stock prices, it's a lot easier to spend big bucks on advertising.

The absence of the packaged goods companies shows the reluctance of on-line as a traditional advertising medium. It works much better for transactional based products. The Unilever deal may show that the wind is changing, but without a dollar amount, it is tough to tell. Mo st likely, the amount is small (certainly given the amount AOL needs to earn to justify its stock price). It probably represents a toe in the water approach for Unilever.

My two cents.

Regards,
JC
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