SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : America On-Line: will it survive ...?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Eric Jorgenson who wrote (2552)3/24/1997 3:25:00 PM
From: John Howell   of 13594
 
Eric,

You're correct (IMO) in stating that revenue from alternative sources isn't directly tied to infrastructure. But in that area AOL has many disadvantages.

1. The ad and sales revenue numbers that are used for AOL projections are inflated.

2. The rate that can be charged for Internet ads (price per pair of eyeballs hitting the ad) is dropping.

3. It's going to be hard to attract advertisers to a medium where potential customers get "busy" signals. You mentioned that you use a redialer and never have to wait more than two minutes. Why are you willing to wait at all? I get ISDN bandwidth at $19.95 a month and I don't have to wait 5 seconds, much less 2 minutes. As a trader, those types of delays would cost me big dollars. As an advertiser, would I be willing to make a customer wait 2 minutes to access my site? I won't have to worry because that customer will already be gone. If AOL wants to grow to 10 million they will need 1 MILLION modems. That's a tripling of the 350,000 number that they haven't even hit yet.

The big problem (for those long AOL)is whether or not you can put any stock whatsoever in the projections and operating numbers from Dulles. So far their track record is abyssmal. Every quarter they miss their numbers by a mile, and every quarter brings announcements of new business models and revenue sources that will put them in the black. Bullshit. The current quarter will be more of the same. Expect to see downward revisions in earnings estimates and soon thereafter an announcement that AOL has hired another "name" or is rolling out another potential "revenue source".

Just my opinion.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News