As rhet0ric stated, a membership increase with lower marketing expenses and a price hike. Not a mass exodus like some were predicting.
Well, Sam, I'm not exactly turning into a bull <g>. I'm just saying that one of the big possible bearish indicators hasn't come through--yet.
It seems to me that AOL changed its strategy recently. Before they were gunning all-out for growth, spamming everyone with free disks and low or standard rates. Recently they changed that strategy, and seem to be aiming for more stable membership, with greater revenue per member. In each case, I think their strategy was/is the right one. They needed subs and market share to become a player, while revenues were secondary. Now they're a player, and have to start focusing on revenues.
The fact that subs are growing despite everything indicates that AOL has a lot of momentum, which could take awhile to slow down or reverse. Next quarter's sub numbers and revenue will be very interesting.
I'm still very bearish long-term, as I think it will be difficult for AOL to stabilize subs and grow revenues while scaling its network to keep up with the Internet, all the while fighting off more and savvier competitors. I'll short eventually, when I see things going downhill for AOL. But to short now would require a belief in a general market or Internet stock meltdown, and I would have a lot of trouble timing that.
While an ad for a Ford explorer might not be of any use to your niece, her parents might enjoy it.
Under most ad models, Ford pays for the view of the ad whether anyone clicks on it or not. A good click through rate is about 2%. There's definitely money to be made in ads. The issue is that AOL is spamming its users in a way that regular ISPs don't, while at the same time charging a higher subscription. As long as their subs hang in there, they'll bag money from them. But if/when subs drop, they'll need to reexamine that.
rhet0ric |
