SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : America On-Line: will it survive ...?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Brian K Crawford who wrote (1347)2/1/1997 9:49:00 AM
From: Harry Larson   of 13594
 
>>Brian Oakes, a Lehman Brothers analyst, is using a worse-case
>>scenario of $16 million to estimate the refund cost.
>>Oakes said the refund expense will have no impact on his earnings
>>estimates because it will be funded by AOL's annual marketing
>>budget of approximately $500 million.

That estimate DOES NOT include impact of the unrestricted one month
free offer. It assumes 10% of subs get cash refunds. It is not unreasonable to assume that another 25% more would take the free
month. That would mean $20m lost revenue. Then assume average usage
by the 25% is 10hours. At fully loaded cost of $0.70/hr = $14m in
expense. Total hit to bottom line = $16+$20+$14 = $50m.

Then there's the cut in marketing and the cancellations.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News