RE: AOL
William,
Wondered what you thought about Blodget's comment about AOL subscriber growth coming in on light side due to UK free internet movement in UK.
From briefing.com
"Based on recent conversations with management, he expects AOL's subscriber growth
number this quarter to be on the low end of the company's guidance-- which was
750,000-850,000-- due to significantly weaker than expected growth in its international
business stemming, in part, from the "free access" movement in the U.K. that is curbing
AOL's growth, and more than likely, prompting it to move toward a free offer of its own to
combat other such offerings from the likes of Microsoft and Dell. Mr. Blodget is quick to
point out, however, that much stronger than expected growth in the U.S. is offsetting some
of the international weakness and that he remains "very comfortable" with his revenue and
EPS estimates given that North American subscribers generate all the company's
revenue. In addition, he also reminded investors that AOL fell short of its subscriber growth
target in the yr-ago quarter by almost 100,000, but because of the strength of its overall
business, that shortfall had little impact on the stock."
US lags UK in certain key areas of telecom innovation and reform. I could see momentum gaining toward free 56kbps access bundles by some of AOL's competitors in US as they emulate the successful Pearson and other ad supported models. People will continue to pay up for cable modem service in a world of free plain vanilla service, but how much is unclear.
SC |
