As most of you know, I became an AOL bear after this stock went into the stratosphere > $100ps. What I didn't understand was that Wall Street was looking at something that I didn't see. They envisioned an incredible opportunity for AOL to earn huge amounts of advertising revenue, which would shortly lead to significant profits. Now as most of us know, Pitman has been aggressively signing up advertisers. So I won't go through the Barnes & Noble contract that I've mentioned several times. Tomorrow there is no question that Wall Street will look at AOL's increased advertising revenue as very impressive. The point is, do you really see AOL signing up advertisers that can sell products at a decent profit? How many of you have bought enough of AOL's advertised products that make you feel AOL's advertising customers will plow their advertising bucks into this venture?
What I believe will happen is that AOL's real revenue will come from subscribers that are paying $21.95 per month (and stick with them). And that the advertising income, after the hype, will be a small nit. If I'm right, and AOL does not sign up the entire world's population plus 18%, in the year 2000, AOL should be a $25-$30 stock.
Unless they make some acquisitions, like a Yahoo. But I don't see that at this time. Only the future will tell. But, by the end of the millennium, Wall Street will give AOL a P/E of, say, 30. So now everyone can figure out what the stock will be trading for, if I'm correct.
Please believe me when I congratulate all of you AOL investors on your millions in profits. If you choose to share some of it with me, I will accept your call and you will not have to call me collect. |
