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Technology Stocks : America On-Line: will it survive ...?
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To: chungkai yang who wrote (289)10/11/1996 1:27:00 PM
From: Richard Lyons   of 13594
 
I'm not so sure your typical consumer understands that
AOL is a slow way to surf the net?

If AOL had a $19.95 flat rate plan, then I think "new"
subscribers would flock to them. Why? Because they
would be precieved as offering everything that the
other ISPs offer plus additional content.

So from a product standpoint I think AOL would end up
with the lion's share of the market if it offered a
competitive flat-rate fee.

On the other hand, from an investment view this stock
is very scary right now. The bulk of AOL's revenue
comes from subscribers, not from advertisments. A
cut in the subscription rate will hurt them financially
in the short-term. Since the street is some what short
term sited, I expect this stock to go down on this news.

Worse yet, the fear that a discount rate will occur
leaves many potential investors selling or waiting on
the side lines.
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