Several AOLcultists on this board have referred to AOL members' "loyalty" as if it were a fact. However, evidence remains that AOL members are an amazingly disloyal bunch, hence their historically high churn rate. Last time we looked AOL was spending @$340 per net subscriber gain. In practice, many "new" members are just on for the one month free ride, cancel and sign up again under another alias.
AOLcultists should not be so sanguine about the "bring your own access" option to AOL's problems. When analyzed, doesn't this option really put AOL members halfway out the door, allowing them to experience the Web unfettered by AOL, in effect making them all the more likely to dump the "training wheels" as superfluous once they get up to speed?
BTW, recent issue of WORTH muses whether AOL really isn't just gonna become another APPLE and notes AOL is not even meeting its advertising targets.
WORTH also has had excellent articles on why cash flow matters, especially when companies, most notoriously AOL as cited by Martin Shillit(?), dissemble about "earnings" (and then when amortization is scheduled to begin bigtime, simply write-off all the accrued expenses to the balance sheet without them ever appearing on the income statement).
Remember, aside from the need for a secondary, AOL hype is very much tied to the fact that AOL "managers" receive an unusually large percentage of their remuneration via stock option plans.
Regards |
