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Technology Stocks : America On-Line: will it survive ...?
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To: John Howell who wrote (968)1/8/1997 11:46:00 AM
From: Joel Sternberg   of 13594
 
>Dave,

What's your point? If AOL has 1 billion customers, and it is losing 10 cents per quarter for each one of
them, they are still losing $400 million per year.

John<

The interesting thing is that you apparently cannot make money on internet service even at $19.95 unless you own the pipes. Yet, Michael Murphy of Overpriced Stock Service and California Technology Stock Letter (not that he is a guru, but he has good ideas) predicts that in 1997 internet access service will drop to $9.95 unlimited. Why? Because the greater entry of telco's and cable companies, who will bundle it and use it as a loss leader (I may have read that "loss leader" part somewhere else). Can AOL compete against that? I do think that advertising dollar will eventually flow, although not on a huge scale because, unlike TV, you can more actively scroll or ignore the ads. But, again, the web sites with the content will generate the ad revenue.
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