I usually see boards with disbelieving longs, lamenting the fact that the market can't see their undervalued favorite. This board is my first experience with disbelieving shorts.
I am pasting in selected bits from the q2 earnings release. Mostly the parts discussing e-commerce, ads, etc. It is the promise in this part of their business that is propping up the stock. I emphasized a couple of sections with ***.
Bob Pittman is completing the transformation from techie/geekie online service to media powerhouse. Some can see it coming....some can't.
<<DULLES, VA, February 6, 1997 --
AMERICA ONLINE REPORTS FY 97 SECOND QUARTER REVENUES UP 64% WITH RECORD
MEMBERSHIP AND SYSTEM USAGE
***Advertising and Electronic Commerce revenues climb 210% over previous year,to $40 million ***
The Company's Other Revenues rose to a record $58.2 million during the latest quarter, roughly 50% greater than in the September 1996 quarter. Of these, advertising and electronic commerce revenues grew even faster, to $40 million from about $24 million in the previous quarter and just $13 million in fiscal 1996's comparable period.
AOL NETWORKS
Bob Pittman, President and CEO of AOL Networks, said: "By every measure,
AOL's growth in membership and system usage during the December quarter was
extraordinary. Our new unlimited-use pricing plans have been enthusiastically embraced by *** more than 80% *** of our members. We also achieved substantial gains in advertising and electronic commerce revenues -- key elements in our new business strategy."
As system usage skyrocketed during the last quarter, AOL's Content led all categories in growth. Among the leading gainers in content usage were AOL Programming, Personal Finance and Games. During the latest quarter, Web hits climbed from 100 million to 175 million daily -- representing 14% of use compared to 86% for AOL's unique content -- and E-mail volume increased from 4.5 million to 7.5 million pieces daily.
The Company ***gained 33 new advertisers*** during the quarter -- including Toys R Us, Glaxo, Hitachi and Turner Cartoon Network -- bringing the total to ***over 90 national advertisers,*** among them many of America's best-known brand names such as American Express, Reebok, Sony, Starbucks, Citibank and Federal
Express.
The newly redesigned AOL Marketplace with more than three dozen stores --including Tower Records, Omaha Steaks, Eddie Bauer, Sharper Image and J.C. Penney,*** logged 2.1 million member hours in December, up from 600,000 in November***. Revenues from transactions alone increased more than 60% over the September quarter.
The latest quarter saw AOL conclude agreements to improve service for itsmembers including:
Excite Inc. agreed to acquire AOL's Internet Search Directory, WebCrawler and become the service's exclusive search service;
*** Ten new banking partners ***-- including Signet Bank and Chase Manhattan -- joined the AOL Banking Center, making it what the Company believes is the nation's largest online banking service with a total of 29 financial institutions represented;
Banyan Systems Inc. agreed to develop a co-branded versions of SwitchBoard-- an Internet business directory -- for exclusive use by AOL members. >>
Brian
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