America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: Todd Daniels who wrote (6054)	11/20/1997 3:44:00 PM
From: J.S.	Read Replies (3) of 13594

Interesting post Todd, I have two comments. I believe network services operating margins are much higher than 15%. I have heard 40 to 60%, if that can be believed. Also Nifty-Serve licensing fees was claimed to be less than 1% of "online services" revenue. This was in early 1996. Since then, online services revenue have declined by 50% while Nifty's subscribers have almost doubled. If the revenue is still less than 1%, then it is not a good deal. Those subscribers, amounting to more than half of CSRV's claim of more than 5 million are essentially worthless to AOL. CSRV's network services are doing great. 84 million is nice. Too bad HRB can't back out of the WCOM deal now (or maybe they can without too many penalties?). If they just got rid of CSi, sell to AOL for $19.95, the stock would trade at a nice multiple -- 4x sales at least by industry standards. That puts the stock above $15. Then again, HRB has made stupid move after stupid move with CSRV. Why should they change now? joe

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