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Technology Stocks : America On-Line: will it survive ...?
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To: Steve Robinett who wrote (6015)11/17/1997 5:37:00 PM
From: Harry Larson   of 13594
 
>>Harry, Your customer support number might even be a little low.
>>In their last 10-Q, they lumped customer support into "Cost of
>>Revenues," which was running about 63%.

Telecom, which is by far the largest expense, is the major component of COR. Support is #2 (though I don't know cost of support related 1-800, which is telecom).

BTW, among the revelations in AOL's Q1 conference call was that it had been stuffing 'facilities related' marketing expense into COR and G&A; but henceforth will allocate it to 'Marketing'. As you know, marketing
as % of revs is a big metric for the Street, so the re-classification
doesn't help.

As with SEC-'advised' reclassification of various components of Product Dev expense in Q4, I sense the hand of the SEC in this. The SEC audit dept is like the IRS. Once they nab you for one thing they're on your case (so to speak) for a looong time.
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