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Technology Stocks : America On-Line (AOL)
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To: Sabrejet who wrote (27673)8/2/1999 2:47:00 PM
From: Vendit™  Read Replies (1) of 41369
 
Who's Worth More? AOL or MSFT

America Online is now approaching the 100 million desktop customer mark, counting AOL, Compuserve, ICQ, Netscape.com, and Winamp. Microsoft has 160 million desktop customers across all of its product lines. Mr. Benjamin did not go into this detail, but if America Online could derive a dollar amount of profit per desktop customer similar to Microsoft's $57.50, and grow at the same rate, AOL would deserve a valuation around $300 billion.

Is an AOL that produces as much or more revenue per user than Microsoft possible? In short, yes. Within 5 years the AOL model will most likely be producing profits of at least $50 per user each year. With even the most conservative growth estimates AOL's desktop user base will reach 150 million. That means that the online giant could rake in $7.5 billion each year in profit, and make my trillion dollar company argument look a lot more likely.

For the full story go to:

streetadvisor.com

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