KB of Robbie Stephens fame Weekly Web Report ...
<snip>
AOL – THE ICEBERG: We believe we are just beginning to see the tip of
the iceberg, in terms of AOL's potential opportunity. We can see that
consumers are just beginning to spend more time and money on AOL. We
believe AOL's deep customer relationships have been reinforced by the
multiple services it offers its customers, and that it is highly
unlikely that AOL could ever be displaced by @Home. We expect another
big March quarter and expect it will be marked by additional broadband
deals. AOL added 1 million additional subscribers in the first six weeks of the quarter, implying a rate of approximately 2 million for the entire quarter, versus our estimate of 1.85 million. Even at a current market capitalization of $97.8 billion, we rate AOL Strong Buy. AOL's current market cap per 1999 member is about $6,000, however, due to the company's rapid subscriber growth, we expect this will be closer to $4,000 by 2001. This compares to TCI, which is valued at $3,000 per member. We believe an AOL subscriber is much more valuable than a cable subscriber, in that AOL has a much more open-ended opportunity with the potential to double its member base in the U.S. alone, not to mention the nearly untapped international market. In addition, the average AOL member spends around 50 minutes per day online, compared to 4.3 hours watching television. Finally, the Internet business is much less capital intensive.
</snip>
S. |
