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Technology Stocks : America On-Line: will it survive ...?
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To: Pruguy who wrote (4740)9/9/1997 4:26:00 AM
From: Yikes   of 13594
 
Don't confuse POTENTIAL with PROFIT!!!

I am amused whenever someone equate potential with profit. Sure the potential to make money on the ever growing Internet is very high, but AOL's business model has NOT earned profit (nor does CompuServe). So it doesn't matter if the subscriber base now swell to 12 million, it still won't create any profit. Since AOL has indicated CompuServe will remain a separate operation, the two will not share resources like other mergers (Office Depot / Staple for example) to cut cost. And chances are, at the first sign of service degradation, CompuServe users will in masses switch to other ISP's (local ISP's, AT&T, MSN, or EarthLink).

Here's my prediction: as the Justice Department mull over the deal, CompuServe will begin to lose its subscribers, which leads to more loss for the CompuServe operation, by the time (if) this deal goes thru, AOL won't add as many subscribers as it claims now, and the added operation would be losing more many than before to weigh down AOL's bottom line.

Yikes
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