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Technology Stocks : America On-Line: will it survive ...?
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To: Zoltan! who wrote (881)12/24/1996 11:14:00 AM
From: Todd Daniels   of 13594
 
In same WSJ article:

Re. Pittman's statement-----

"AOL also can spread costs over its seven million members,
more than twice the customer base of its next largest
competitor."

Implicit in that statement is gross margin leverage. But the
largest costs, telephone lines, customer support, modems,
routers etc. are proportional to number of users.

Find the leverage

AOL FY
91 92 93 94 95 96

Total Subs (000s) 131 182 303 903 3000 3200
Gross Margin 48% 54% 52% 32% 36% 37%
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