DA,
You comment that you thought I was are grossly under-estimating the growth potential in the leveraging side.
I didn't think I was estimating at all. I thought I was commenting on the evidence so far. There is scant evidence that AOL can grow the percentage of total revenue contributed by other than subscriber growth. It's an issue of proportion, not absolute numbers. The actual dollar value of that revenue has been growing substantially and, as very high margin revenue, contributing substantially to cash flow. But, if the proportion of other revenue can only grow with subscriber growth, then you can only hit Jeff's revenue numbers by growing from 17 to 91 million subscribers in three years.
Instant messenger, so far, is just an added feature for both AOL customers and non-customers and directly generates no revenue on its own, though outsiders might be drawn to AOL because of it and it has future potential for carrying little ads.
You also comment that perhaps we are barking up the wrong tree, and Steve Case has it all figured out.
I doubt anyone, Case included, has it all figured out. I think Case, Pittman et al are in an extremely dynamic and fluid business. Their goals are obviously to grow the business in any way possible so they try a little of everything and see what works. If it works they keep it, if not, they cut it lose, a pragmatic approach, not a grand vision.
Best,
--Steve |
