> If AOL has so few deals, I can not imagine what the likes of MSN,
> Prodigy, Yahoo!, Excite, etc. etc. have. I believe N2K went off
> smoothly, Preview Travel is next, and so on and so on.
Never heard of N2K or Preview Travel until their deals with AOL. The fact that these companies must offer IPO to pay for their deals is an indication that their business model is unproven and based on the same hope for "potential" as that of AOL. If AOL's subscriber base is less than it claims to be, then N2K and Preview Travel will not survive their first year. AOL needs to sign with proven companies, such as Tower Records instead of N2K, American Express Travel instead of Preview Travel, in order to secure its future.
One can relate this issue with AOL's recent decision to begin charging advertiser a flat fee rather than taking percentage of the online sales. Many small advertiser cannot afford the new rate hike according to their current level of sales thru AOL. While I applaude AOL for recognizing the dismal sales figure and raising its advertising rate, it revealed how unproven AOL advertising really is.
Yahoo! and Excite has much bigger audience than AOL. Yahoo!'s section about cats will capture the cat lovers of the entire Internet audience (400 million worldwide I think) while AOL's section about cats only capture the cat lovers from its 9 million subscribers. It's much more effective to advertise cat food on Yahoo! than AOL.
In closing I will include a piece of news that came this morning. It is a deal between Netscape and Amazon.com. It compares to AOL's deals in many ways. First and foremost is the name recognition of Amazon.com. Second is Netcenter (and Yahoo and Excite) are taking role as a free content provider. Big companies like Amazon.com will sign up with Netcenter because it has much bigger audience than AOL. All in all, AOL is fighting a losing battle. It doesn't deserve to be $85 per share for its slowing growth rate (and losing) of subscriber base and non-existant advertising dollars.
"NETSCAPE (35-1/8, up 3/16 @ 9:50am EDT) has agreed with Internet
bookseller AMAZON COM (45-3/4, up 2-1/4 @ 9:50am EDT) to name
Amazon.com the exclusive bookseller in the commerce section on
Netscape's free online servce, Netcenter. Under the terms of the
agreement, the two companies will offer members of Netscape
Netcenter a co-branded storefront where the online bookseller will
be easily accessed through Netscape Netcenter. Financial details
of the agreement were not disclosed. (Reuters 04:14 AM ET
10/20/97)"
Yikes |
