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Technology Stocks : America On-Line: will it survive ...?
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To: Keith O'Neill who wrote (4820)9/17/1997 3:56:00 PM
From: Harry Larson   of 13594
 
>AOL sold ANS for the cash that they need

I'm not so sure the deal was done mainly to get cash. After all, at
pre-deal prices $65-$70, AOL could have gotten $500m via secondary
and diluted only 5%. That's more than all the cash from Tel-Save
through $175m from WCOM deals.

And CSi long had faded as competitive threat. Its remaining 2.6
million are the same number that signed with AOL of their own
initiative just since June 1996. And the popular math is that AOL
paid for the CSi subs what it would have via normal marketing.

So, why do the deal? Not all, but a lot is just that it was a
"must do". A totem. A symbol. A crowning achievement, especially
for Steve C., who I've heard was (understandably) obsessed with not
letting anyone else get CS. Time wouldn't have done a cover to mark
11.6m if AOL had gotten them the normal way.
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