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Technology Stocks : AUTOHOME, Inc
ATHM 20.73-1.0%Feb 4 3:59 PM EST
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To: Larry Zenith who wrote (13065)7/28/1999 11:32:00 PM
From: RTev  Read Replies (1) of 29970
 
Do you think it is reasonable for Mercedez to lower the price in order to jack up market share? No. The first thing first is to get the product available wherever there is a demand.

I think the Mercedes example is a good one. DaimlerChrysler, if they're wise, won't consider offering a cheap car under that prime brand. They could slap one of their stars onto a Neon, but it would only degrade the brand (as GM discovered with the Cadillac Cimarron).

Brands are important. Right now, "@aol.com" is the "Chivy" of internet addresses. Unless they get a Camaro or Corvette into their stable, they are on their way to becoming the "Hyundai" of addresses (which they already are to many of us).

"@home.com" retains at least some of its "Mercedes" flavor. It would be a pity to lose that when they could easily transform the perception into higher ad revenues for those few who actually use their web resources.

You also mentioned Covad's residential DSL offerings in Seattle. What's interesting about that is that they're not competing on price. They charge far more than the competing DSL offerings from US West or cable service from TCI (which is less widely available than DSL), but they justify the high price with Quality of Service guarantees. It's a good lesson.
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