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

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To: Sam who wrote (9901)5/7/1998 9:36:00 AM
From: RagnBull  Read Replies (2) of 13594
 
AOL's growth boosted by Compuserve acquisition

Taking a closer look at the comparative quarterly numbers, it is interesting to note that:

1. Assuming that Compuserve's quarterly revenues were flat at around $40 million per month, Compuserve contributed approximately $80 million (ie. 2 months revenues) to AOL's reported revenue growth. So, without Compuserve's revenue contribution, AOL's year-to-year growth rate was about $163 million or 36.34% which is a much slower growth rate than AOL's announcement would have the reader believe. As Compuserve is unlikely to grow rapidly, AOL will have to find its growth in the AOL side of the house.

2. As I don't know how much by way of adverstising, "Commerce and Other Revenues" Compuserve contributed to AOL's 72% gain, I can't measure the growth that AOL generated in this vital area of its business.

My closer look at the numbers is starting to make me nervous.
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