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Technology Stocks : MindSpring Enterprises (MSPG) Another ISP.
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To: Shafik Habal who wrote (1085)6/29/1999 3:45:00 PM
From: Mr Bones  Read Replies (1) of 1434
 
Shafik Habal - Service bundling

> what are your thoughts about the bundling of
> Internet service w/ PCs?

Peter Lynch uses the term "diworsification" to describe companies that lose their focus by expanding their business to include products and services that don't enhance their core product line. I understand that the ISPs' recurring revenues are attractive to the box makers who are stuck in a perpetually low-margin business. But a box maker buying an ISP sounds like diworsification to me. I don't understand how a company can give away a $500 box as a bonus for signing up for $20/month Net access and still expect to make money.

But I might just be displaying a lack of imagination. Maybe a box maker/ISP combo would be able to supply $300 boxes, charge $25/month for Net access, demand a minimum 5 years signup period (guaranteeing future revenue stream) and gather enough demographic info about their customers to enhance their advertising value of their real estate.

Still, I think the most likely suitor for MSPG is Bell South or a bandwidth provider who wants to pull traffic onto their lines. MSFT is another possibility but a long shot.

Just my $.02. Can someone illuminate for me why the box makers are so interested in ISPs?

Peace
Mr Bones
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